Product Brief :
The LCS Framework is a Bank Indonesia program that aims to encourage wider use of local currencies for the settlement of bilateral transactions between Indonesia and partner countries (in this case China).
In connection with the official implementation of the bilateral transaction settlement cooperation with local currency between Bank Indonesia (BI) and the People's Bank of China (PBOC), on September 6, 2021, BI has appointed PT Bank ICBC Indonesia (“Bank ICBC”) as the Bank ACCD (Appointed Cross Currency Dealer) Indonesia through Letter of Appointment from Bank Indonesia No.23/191/DPPK/Srt/Rhs. , With the appointment of Bank ICBC as one of Indonesia's ACCD Banks, Bank ICBC has been able to carry out financial activities and financial transactions related to the Settlement of Bilateral Trade Transactions between Indonesia and China using Rupiah and Yuan.
Settlement of Local Currency (LCS) Rupiah and Yuan is the settlement of bilateral transactions by business actors in Indonesia and in China using local currencies, in this case Rupiah and Yuan in the context of settlement of trade and direct investment transactions, where the implementation can only be done through ACCD Bank.
Bank ICBC has met the criteria as an ACCD Indonesia Bank with the advantages and ability to facilitate financial activities and financial transactions between Indonesia and China, has the ability to establish business relationships with banks in Indonesia and China, and has access to a network of offices in Indonesia that has a parent or branch in Indonesia, China and recommended by PBOC (People's Bank of China).
Money transfer services from Indonesia to China using local currency (Yuan) or Rupiah (Yuan) provide convenience and benefits and benefits for LCS customers.
LCS services can be used for various kinds of transactions, such as:
● All payment activities for trade in goods and services between Indonesia and China (except: grants, donations and etc.)
● The need for tuition fees, accommodation costs and medical expenses in China
● Receipt and payment of labor compensation transactions
● Investment income and payments
LCS transaction terms and conditions
1.LCS customers have an account at Bank ICBC Indonesia.
2.LCS customers may open a Sub-Special Purpose Non-resident Account (Sub-SNA) in Yuan currency for the purpose of receiving funds from China or for the purpose of sending funds.
3.LCS customers who conduct foreign exchange transactions, must meet the requirements required by the regulator in accordance with the provisions of the applicable regulations.
4.For Indonesia - China LCS: all financial activities (remittances) and financial transactions (direct Quotation Yuan/Rupiah) must be accompanied by underlying transaction documents in accordance with applicable regulations.
The obligation to include underlying transaction documents for financial activities and financial transactions for Indonesia-China LCS applies to any amounts in accordance with the applicable regulations.
The types of underlying transaction documents can be in the form of:
a. Import export documents: L/C, standby L/C, Trust Receipt, letter of guarantee, Declaration of Export of Goods (PEB) or photocopy of Notification of Import of Goods (PIB)
b. Billing documents: Commercial invoices or invoices, debit notes, sales contracts, invoice lists.
c. Proof of direct participation activities or proof of company ownership (owner of equity)
d. Other supporting documents in accordance with Bank Indonesia regulations
Feature and Benefit
● Remittance (Fund Transfer)
● Foreign Exchange Transactions and as the Hedging Instrument
● Trade transaction financing (Trade Financing)
● Investment financing
● More efficient exchange rates without the need to convert currency to USD, with direct quotes for CNY transactions against Rupiah.
● Faster, easier and safer transaction settlement. Remittances within the ICBC group are made through an internal clearing system, which costs less than traditional remittances.
● Outgoing funds and incoming funds in the ICBC group can be settled on the same day.
● Alternative investment using Yuan currency.
All ICBC Bank branches throughout Indonesia are ready to serve customers' LCS transaction needs.
For further information, please visit nearest ICBC Branch or contact our Call Center Officer who is ready to help 24 hours x 7 days at I Call ICBC 1 500 198.
*Terms and Conditions apply.