Bank of China (Hong Kong) Ltd plans to issue negotiable certificates of deposit (NCD) in the Chinese mainland and is expected to become the first offshore renminbi clearing bank to secure an issuance quota in the market.
The bank plans to apply for an NCD issuance quota of 22.2 billion yuan ($3.3 billion) for this year, according to an issuance plan published Tuesday on the National Interbank Funding Center’s website. The plan has been filed with the People’s Bank of China, the country’s central bank.
NCDs are money-market instruments with maturities of up to one year, typically used by mainland banks to raise funds from other financial institutions.
Bloomberg reported that BOCHK would be the first offshore renminbi clearing bank to receive such a quota, citing a statement from China’s interest-rate self-regulatory body.
The bank said it became Hong Kong’s sole renminbi clearing bank in 2003. It provides cross-border services to multinational companies, mainland businesses expanding overseas, central banks, and supranational institutions.
