Published On: Thu, Oct 16th, 2014

Citi Launches Automated RMB Cross-border Sweeping From China To London

Sandip Patil, APAC Head of Liquidity Management, Citi -

Sandip Patil, APAC Head of Liquidity Management, Citi –

Building on its global RMB cash pooling solutions, Citi on 16 October announced the implementation of its first RMB Cross-Border Auto Sweeping structure from China to London. The latest development allows Citi to have ‘live’ automated RMB cross-border sweeping capabilities in China, Hong Kong, Singapore and London.

Citi’s global concentration engine allows clients to sweep true end-of-day balances into London without any loss of value. This platform also comes with tracking and reconciliation of intercompany loan positions, automated mechanisms to control lending positions, as well as reporting to meet local regulatory and reporting requirements.

Rajesh Mehta, EMEA Head of Citi’s Treasury and Trade solutions said: “Automated RMB sweeping to London is an important addition to Citi’s RMB footprint given that London has traditionally been the centre for managing currency risk. We have a number of clients already manually concentrating their RMB into London as part of multi-currency pools to leverage RMB liquidity and centralize management of FX exposures; our new automation capability makes this process even more efficient for clients.”

Sandip Patil, APAC Head of Liquidity Management added: “With our local depth and global concentration platform, Citi enables our clients to integrate RMB effectively into their treasury and liquidity structures, irrespective of location, truly paving the way for the RMB’s development as an international currency. Our success in replicating our G10 expertise and capabilities into the RMB space is playing a critical role for our clients.”

The structure has been put in place for Swiss based company Pentair – a global water, fluid, thermal management and equipment protection partner – and was implemented using Pentair’s registered entity in the Shanghai Free Trade Zone (“SFTZ”), thus enabling the company to integrate their daily working capital RMB balances into their global cash pool. Benefits will include improvements in the company’s liquidity management, capital utilization efficiency, reduced cost in cross-border transactions, as well as intragroup financing and foreign exchange benefits.

Terri Scherber, Senior Treasury Director at Pentair, said: “Pentair was keen to take advantage of the newly deregulated SFTZ policies and connect our domestic RMB funding structures to our global liquidity pool. Citi’s automated sweeping solution now provides us a much more efficient way of managing this process.”

Amit Agarwal, EMEA Head of Liquidity Management Services said: “Citi has one of the most extensive geographic and currency footprints, supporting some of the most sophisticated treasury management structures. The incorporation of RMB into London-based cash pools will be of significant benefit to both Chinese and multinational companies in the SFTZ, allowing them to capitalise on interest increases, effectively offset overdrafts in low yield hard currencies, as well as achieve greater visibility and improved risk management.”

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