(Yicai Global) Jan. 7 -- An area of Shanghai's Pilot Free Trade Zone has launched a pilot to relax bank account requirements to ease foreign cash inflows.

Foreign-funded firms located in the Lingang Special Area of the China Shanghai Pilot Free Trade Zone won't need to maintain a separate bank account for yuan-denominated inflows anymore, the central bank's Shanghai branch said recently in a circular. But they still need to report how they will use the incoming funds.

The policy should save lenders' and foreign firms' time, an official in charge of an international finance department at a large state-owned bank told Yicai Global. Before this, gathering all the documentation to open such a renminbi-denominated account could take weeks.

Moreover, firms can save money as they don't need to maintain these special accounts, which should encourage companies to use more cross-border renminbi funds, the official added.

The Chinese yuan is the second-most popular cross-border currency used in China, according to public information. The redback is the world's fifth-biggest currency for payments and eighth-largest for trading settlement.

Editor: Emmi Laine