Asian Clearing Union

The Asian Clearing Union is an intergovernmental arrangement for clearing eligible payments among participating central banks and monetary authorities. Established in 1974 under a regional cooperation initiative, it reduces the number and value of gross cross-border settlements by calculating multilateral net positions. It is an operating payment arrangement, not a commercial bank or a supranational currency authority.

Operation and statecraft relevance

Participation, eligible transactions, settlement units and exclusions are governed by ACU arrangements and national central-bank directions. Those rules change. The current member list and settlement procedures therefore require confirmation from the ACU and relevant central bank on publication day. The Reserve Bank of India has issued rules for Indian authorised dealers and has continued to examine local-currency settlement through the ACU mechanism.

Netting can conserve foreign exchange and reduce the number of correspondent transfers. It does not eliminate the need for settlement assets, national compliance or participating central banks. The presence of the Central Bank of Iran and other sanctioned jurisdictions creates legal and operational exposure, but it does not make the ACU an evasion organisation. A sanctions finding must identify the transaction, parties, authority and applicable jurisdiction.

The ACU illustrates regional financial integration and limited Network reconstitution (parallel rails). Its multilateral design can reduce dependence on transaction-by-transaction Western correspondent channels. Its scale and resilience still depend on participant coverage, convertibility, liquidity and national implementation. It should be distinguished from bilateral local-currency agreements and Correspondent banking and Nostro/Vostro architecture. Transaction volumes and balances need dated central-bank data, not inference from membership.

Current operational claims require confirmation from participating monetary authorities.

Sources

1. Asian Clearing Union, official site (accessed 30 July 2026).
2. Reserve Bank of India, Asian Clearing Union mechanism directions (accessed 30 July 2026).
3. Reserve Bank of India, Annual Report 2024-25 (2025).