Geneva’s oldest private bank Lombard Odier’s expansion plan into China has been hit by the People’s Bank of China’s suspension for new offshore product sales, according to the bank’s Asia management.

The Swiss bank’s comments is the first confirmation for the widely circulated rumour of a suspension for the Renminbi Qualified Domestic Institutional Investment (RQDII) programme which allows yuan to be channelled into investments outside of China. China’s central bank has yet to release any official statement to confirm that it has ordered the stop via “window guidance”.

Vincent Duhamel, head of Asia of Lombard Odier said: “Before, there were more institutions that were trying to create products for clients to diversify, which is why I think the PBOC put a stop to it, because there was so much pressure building up with financial institutions creating products to accommodate the needs of Chinese clients that wanted to diversify on a global basis. The PBOC was trying to figure how to do it with a more systematic and a more orderly fashion.”

The 200-year-old Swiss bank which controls HK$1.6 trillion of client assets worldwide and is still one of the few actual private banks still funded by its partners’ own capital – last year entered into a partnership agreement with Fujian-based Industrial Bank to jointly develop a private banking business. It was agreed its first foray under the agreement would be to issue a series of bespoke offshore offerings to Industrial Bank’s high-net-worth clientele. Under the agreement, Lombard would offer the financial products while Industrial Bank would help with marketing and client relationship management.

In November, Lombard launched a fund that would help channels investor’s capital out of China, just before the PBOC’s early December shut down order. The fund invests into a global multi-asset strategy which Lombard manages out of New York. The bank’s second release in the pipeline was disrupted by the PBOC order.

“We structured funds using their (Industrial Bank’s) allocations offered to their clients in China,” Duhamel said. “One of them has been done in November. We are working on another one but we have had to slow down. Clearly things have changed in the last few weeks.”

“At some point the PBOC will allow more of the capital to leave China to continue,” Duhamel said.

The bank is still keen to tap into in the China wealth market. But pending on when PBOC reverts its stance on offshore capital flows, the bank’s mangers admit it may require a change of strategy or setup.

Vincent Magnenat, chief executive of private banking Asia for Lombard Odier said: “We are discussing different ways, of different models. It’s a partnership for medium, long term.”

Duhamel said the Swiss bank has so far not received any extra-territorial request from the Chinese authority for orders to reveal or turn over mainland clients accounts under the state’s current dual drive for an existing anti-corruption campaign along with the central bank and forex watchdog’s new drive to enforce against illegal offshore flows.

But he said that may set to change.

“If I have to speculate, at some point, they are going to do it like the US. You are going to have a Chinese version of FATCA. That is a question of time. In the next two, three or four years, at some point, they are going to say, if you want to continue your business in China, you will have to comply. Any organisation has to work with the assumption that this is going to be the case,” Duhamel said.

FATCA, or the Foreign Account Tax Compliance Act is a US law which requires foreign financial institutions to provide data on taxable wealth held outside the country by US nationals.

Magnenat said he expects the Asian private banking scene will see further consolidation into 2016. But Lombard Odier is interested in hiring “opportunistically”. The bank currently has 30 relationship managers in the region and operates out of Tokyo, Hong Kong and Singapore.