ISSUING AUTHORITIES:

People's Bank of China

State Administration of Foreign Exchange

DATE OF ISSUANCE:

September 22, 2021

The People's Bank of China and the State Administration of Foreign Exchange have jointly drafted the Provisions on Matters Related to Overseas Loan Business of Banking Financial Institutions (Exposure Draft), to gather public opinions from September 18, 2021 until October 3, 2021.

The regulation proposes to put both the overseas RMB service and foreign currency loan service under the same policy framework, and encourages domestic banks to offer local currency loans to offshore customers. Compared with overseas foreign exchange loans, the scope of RMB loans for overseas projects by domestic banks is currently narrow and only limited to overseas direct investment, foreign contracted projects and export buyer's credit related enterprises. The regulation relaxes this restriction and allows domestic banks to directly offer their overseas RMB loan service to overseas enterprises within the approved business scope. The overseas loan recipients are no longer limited to "Going Out" projects. In terms of the method of loan provision, domestic banks may also lend money to overseas banks for a term of more than one year.

Reference:

《中国人民银行 国家外汇管理局关于银行业金融机构境外贷款业务有关事宜的规定（征求意见稿）》公开征求意见的通知