People's Bank of China's Shanghai Head Office announced the launch of foreign currency cross-border treasury center pilot program in the China (Shanghai) Pilot Free Trade Zone on Friday.

The pilot program allows companies to achieve centralized fund management by integrating foreign currency cross-border pooling and payment netting.

Twenty-one multinational companies have signed agreements with 13 banks on centralized foreign currency fund management.

Under the structure, a multinational company can use its FTZ-registered entity as the leading vehicle to integrate the group's domestic cash pool and its global cash management structure.

The multinational company can also implement a payment netting structure by leveraging banks' netting system to include China into the global netting arrangement and settle the net amount with their offshore treasury center.

Zhang Xin, head of the PBOC Shanghai Head Office, said the pilot program will hopefully bring more funds to the FTZ and enable more smooth foreign currency fund management for FTZ-registered headquarters of multinational companies.

FTZ now hosts some 35 multinational companies' headquarters; about 10 percent of all the multinational companies' headquarters are registered in Shanghai.

"We hope that the program will bring about experiences and learning which can be introduced to other cities and regions across the nation," said Zhang.

Shanghai FTZ lifts foreign-currency deposit rates cap

UK, China to sign historic currency clearing deal

Currency exchange opened in Shanghai metro station

Top 10 most-used currencies in the world	RBS scheme to help cross-border cash flow