The Hong Kong Monetary Authority (HKMA) has signed an agreement with the Chinese central bank to promote cross-border linkages for the Faster Payment System (FPS), creating a framework for facilitating more commerce and people flows on both sides.

The announcement came after Friday's meeting between deputy governor of the People's Bank of China (PBOC) Lu Lei and HKMA's deputy CEO Howard Lee, where the two exchanged views on deepening financial cooperation between mainland China and Hong Kong.

Enhancements to cross-border payment arrangements to make it easier for Hongkongers to travel, live, work or retire on the mainland have been in the works for some time.

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At the end of June, HKMA CEO Eddie Yue Wai-man said in an article that the memorandum of understanding would establish a "cooperative framework" for the linkage, which would provide a "safe, efficient and convenient means for cross-boundary payment and settlement, facilitating economic activities and flows of people between the two places".

Headquarters of the People's Bank of China is pictured in Beijing, September 28, 2018. Photo: Reuters alt=Headquarters of the People's Bank of China is pictured in Beijing, September 28, 2018. Photo: Reuters>

There were no further details on the framework in Friday's announcement.

The current remittance cap is 80,000 yuan (US$11,015) per day from Hong Kong to the mainland, according to the HKMA. New remittance limits, or quotas, will be decided by China's State Administration of Foreign Exchange, the HKMA had previously said.

The relaxation of cross-border payments will benefit Hongkongers who are looking to buy property in the Greater Bay Area, as outlined in the policy announcement at the start of the year.

The PBOC and HKMA unveiled six policy enhancements in January to support Hong Kong as China's global financial hub. The measures also include expanding two cross-border trading schemes, the Bond Connect and the Wealth Management Connect mechanisms, as well as e-CNY pilots in Hong Kong and cross-boundary credit referencing collaboration among banks in Hong Kong and on the mainland.

The logo of HKMA is seen at its offices in Central. Photo: Yik Yeung-man alt=The logo of HKMA is seen at its offices in Central. Photo: Yik Yeung-man>