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Deutsche Bank has become the first to implement an interbank host-to-host platform with Bank of China.

The solution, jointly implemented for Bosch China, an automotive arm of the German electronics giant, will essentially allow the company to move money between its accounts at the two banks, both domestically and cross-border.

“Bosch China can use Deutsche Bank’s e-banking platform to operate Bank of China’s account and make payments. The connectivity is set up at domestic level, but users can make both domestic and cross-border payments via this platform,” Carl Wegner, head of global transaction banking for Greater China, tells GTR.

The cross-border transfers are, of course, subject to the capital controls currently employed by the government: there is a limit to the amount of money one can transfer out of the country at any one time.

But Deutsche Bank is confident that as the government continues its fiscal liberalisation programme and moves towards a more market-based economy, the solution will find a greater market, particularly given that the solution allows for the transfer of both renminbi and foreign currency.

“The solution can be replicated for other clients. In fact, we have already received interest from a few other multinationals with operations in China. We are excited about all the opportunities that the liberalisation of the currency has given and continues to give to our clients,” Wegner says.

The banks have been working on the solution since September 2015, when a joint project team was established. The main aim is to allow Bosch China to optimise its cash management and liquidity. Companies operating in China have previously struggled to move money from one part of the business to another, while cross-border cashflow is a very nascent thing in the Greater China trade market.

Even as concerns over the People’s Bank of China (PBOC)’s forays into the currency markets persist, banks remain confident that investment in Rmb-led solutions will become an increasingly important factor in doing business in Asia.