The expansion of Renminbi operations in Singapore has been speeding up, as banks raced to offer yuan deposit products and access to bonds to meet the growing appetite for the Chinese currency.

ICBC, the world's largest commercial lender, officially inaugurated its first overseas RMB Processing Center here on Friday, the same day Singapore's second largest bank by assets OCBC launched two offshore RMB deposit products, following similar moves by local rivals DBS and UOB as well as the local branch of global banking giant HSBC.

"Singapore investors and our customers have shown very strong interest in Renminbi-denominated deposits and investments and we expect this to continue as the RMB gains prominence," a spokesperson for HSBC said.

RMB processing center

Wang Lili, executive director and senior vice president of ICBC Group, said the banking giant will leverage on the favorable geographical location and business environment as an international

financial and trade center to make the Singapore branch "ICBC Group's RMB Processing Center for Southeast Asia."

While the establishment of an RMB Processing Center will bring no major difference to ICBC's RMB operations in Singapore, it is a branding effort by the bank to push ahead its offshore RMB operations.

It is a decision thoroughly thought over to establish such a center in Singapore, and it shows the bank's confidence in the prospects of the RMB businesses in Singapore, said Wang Lili.

She highlighted ICBC's status as the world's largest bank in terms of RMB transactions, saying that the banking giant is now striving to extend domestic RMB capabilities to beyond the Chinese markets.

"The establishment of RMB Processing Center marks yet another major breakthrough in the steady implementation of the bank's internationalization strategy," she said.

The Singapore branch of ICBC is one of the first to start cross- border RMB settlement in 2009. It is now No. 1 by the number of transactions and No. 2 by volume among the overseas branches of ICBC group.

Surge in RMB business

In a sign of acceleration of the growth of RMB businesses over the recent months, the Singapore branch of ICBC said its RMB deposit balance grew by an astounding ten times from the end of 2010 to hit nearly 2 billion yuan (304 million U.S. dollars) by the end of Feburary this year.

Meanwhile, other Chinese banks, like the Bank of China, are also developing their RMB businesses here.

The card business is also growing quickly. The volume of transactions made through China Unionpay cards issued in cooperation with the banks in Southeast Asia surged 89 percent year on year as at the end of 2010, Yang Wenhui, chief representative of China Unionpay, said in a recent interview with Xinhua.

China Unionpay now has card business operations in 12 countries in the region. By the end of 2010, 99 percent of the ATMs in Singapore accept Unionpay cards, as do 70 percent of the shops.

China Unionpay also plans to launch new RMB card products within the year, including possibly debit cards and cash cards, Yang said.