Cross-border cash transfer of the renminbi(RMB) between China and Singapore began on Wednesday in Guangzhou.

The transfer by the Guangdong provincial office of the Industrial and Commercial Bank of China (ICBC) will reduce exchange costs and risk for banks in Singapore and Southeast Asia, said Niu Gang, general manager of ICBC operations. .

Singapore was the first country to sign an RMB clearance agreement with China and has massive volume of cross-border RMB businesses, said Wang Jingwu, head of the Guangzhou branch of the People's Bank of China (PBOC).

In the first five months this year, RMB settlement between China and Singapore reached 421 billion yuan (68.4 billion U.S. dollars), of which 17 percent was traded between Guangdong and Singapore, said Wang.

The PBOC, China's central bank, will actively support RMB cross-border transfer on a regular basis and maintain an orderly flow of currency between China and Singapore, said Li Huifeng, deputy head of the PBOC currency, gold and silver bureau.

ICBC, the world's biggest bank in terms of assets, had RMB clearance business worth more than two trillion yuan in Singapore last year.

Single-day settlements rose to 80 billion yuan in its Singapore branch in 2013.