Standard Chartered China and Shell China have been granted approval to set up a Foreign Currency Cross-border Sweeping structure.
The structure, approved by the Chinese government following their pilot scheme to centralise foreign currency management for multinational companies (MNCs), allows Shell China to use surplus cash for business needs; thereby reducing trapped cash, a common problem faced by MNCs - and enable greater working capital efficiency.
By using this structure, Shell China aims to enhance its liquidity through the automatic sweeping of its onshore and offshore excess foreign currency (within an approved foreign debt quota and overseas lending quota).
Sridhar Kanthadai, regional head of Transaction Banking North East Asia, Standard Chartered Bank said: “This is a milestone for MNCs operating in and with China.
"The ability to effectively manage excess foreign currency liquidity globally is paramount to optimising cash management for MNCs. This will encourage them to increase their trade and investment in China as it gradually opens up to the rest of the world.”
