No customer complaints over yuan-related products in Singapore: MAS

[SINGAPORE] Retail deposits make up a small portion of all yuan-denominated deposits here, said the Monetary Authority of Singapore (MAS), while pointing out that it may review financial institutions' sales practices for investment products.

MAS has not received any customer complaints with regard to yuan-related products offered by financial institutions, the regulator said in response to media queries late on Friday.

Total yuan deposits here hit 200 billion yuan (S$40.9 billion) at the end of last year, "of which, retail deposits comprised a small proportion", an MAS spokeswoman said.

"MAS has not received customer complaints over yuan-related products offered by financial institutions (FIs) in Singapore," she told The Business Times.

She said that FIs must assess the knowledge and suitability of their customers when offering investment products to them. Their responsibility includes explaining the product features and risks clearly and effectively to customers, and putting in place adequate safeguards to protect them.

"As part of MAS's supervision of FIs in Singapore, MAS may review FIs' sales practices for investment products," she added.

The supervisory care extends to foreign exchange (FX) trades executed by banks in Singapore, a bank source told BT. "Document checks are required when we do RMB (renminbi) FX by using the onshore rate through the clearing bank as there is a requirement that the FX must be supported by merchandise trade," the source said.

MAS also expects the banks to perform independent audits, and may seek evidence that proper processes are in place.

There is "less concern" when it comes to trade settlement in yuan, the source noted, as the receiving bank in mainland China is the one responsible for ensuring that the client is entitled to receive the payment from overseas.

MAS said that the growth in RMB deposits reflects the growing trade and investment ties between China and the region. Demand has also been fuelled by the relaxation of the People's Bank of China's rules last year, allowing companies to channel surplus yuan liquidity offshore for centralised management.