China will allow foreign banks to issue their own
renminbi-denominated credit and debit cards immediately, in
accordance with a decision reached at the China-US Strategic
Economic Dialogue.
"This will allow US banks to offer a full range of renminbi
services and increase the amount of capital under their management
for investment," a US official said.
Under the Administrative Rules on Foreign Banks, which took
effect last December, overseas banks can issue their own brand of
renminbi bank cards when they register as local entities.
However, regulations and technical problems, such as risk
control and payment systems, need to be clarified in the new
banking card regulation.
"An initial draft of the regulation has been completed," said Su
Ning, deputy governor of the central bank, at a press conference
last month.
According to Su, the regulation, drafted by the Legislative
Affairs Office of the State Council, the People's Bank of China and
the China Banking Regulatory Commission, is under revision and will
be issued as soon as possible.
The current bank card business in China is regulated under a
rule issued in 1997 by the central bank, which has no terms
regarding the foreign-invested bank card business.
Many overseas banks that had incorporated in China and have
plans to do so are waiting for the new bank card regulation to move
forward.
"We plan to issue a renminbi-denominated debit card first and
then a credit card within the year," Raymond Yu, general manager of
Bank of East Asia (China) Ltd, said in an interview with China
Daily.
He said the bank has agreed with China UnionPay, the only
Chinese bank card system, to cooperate on bank card transactions,
and it was waiting for regulatory approval.
Officials from HSBC and Standard Chartered Bank also said that
they are preparing for the business and will announce their plans
when the new regulation is issued.
It is expected that locally-incorporated banks will enjoy the
same regulatory treatment as Chinese banks.
Domestic banks are also expecting the issuance of the new bank
card regulation. The old regulation is considered out of date
because of the rapid development of the financial market.
As an important part of the banks' retail business,
foreign-invested banks have started to prepare for it since last
year.
(China Daily May 25, 2007)