Singapore-based DBS Bank said it has been authorized by the People's Bank of China (PBOC) to act as a yuan clearing bank in Singapore, becoming the first local lender to secure the designation.

DBS said in a statement that it has also received approval to participate in over-the-counter trading in China's interbank bond market for overseas institutions, further expanding its access to China's onshore financial markets.

The approvals strengthen DBS's role in facilitating cross-border yuan transactions and supporting the international use of China's currency, as financial ties between China and Southeast Asia continue to deepen.

With the appointment, DBS becomes the second yuan clearing bank in Singapore. The Singapore branch of the Industrial and Commercial Bank of China (ICBC) was designated as the city-state's first yuan clearing bank by the PBC in 2013, according to The Standard.