Hong Kong banks opened Wednesday morning to a largely positive response to the launch of renminbi-based personal banking services in Hong Kong, which are in strong demand as the currency continues to gain momentum in the territory.

Following the launch, Bank of China Hong Kong (BOCHK)'s deputy chief executive Lam Yim-nam said 10,000 customers had already registered to open RMB accounts before the start of personal services yesterday, including many corporate and new clients.

Thousands of customers opened RMB accounts, with total deposits amounting to about HK$1 billion (US$128 million), he said.

Lam said he expects the bank's RMB services to continue to attract new customers as the currency has a higher interest rate and has been circulating in the territory for a period of time.

He said although BOCHK's interest rates for RMB deposits are lower, the bank has other advantages including high transparency, a wider range of services and an extensive branch network in Hong Kong and on the mainland.

"I found the interest rate attractive, and I am opening the account as an investment tool," said one of the first customers who made an RMB deposit at BOCHK yesterday morning.

"We are opening RMB accounts for convenience, as we spend a lot of time working on the mainland. We compared the interest rates of several banks before coming to this decision," a customer at a local BOC branch said yesterday.

A spokesman for the Standard Chartered Bank said RMB transactions increased 40-fold since the bank began providing personal services in the currency, and it is optimistic that this positive trend will continue.

The Bank of East Asia said a substantial number of customers opened RMB accounts on February 25, with deposits for savings and fixed accounts averaging at 17,000 yuan.

Wing Lung Bank Director Chung Che-shum said while there were many enquiries, initial responses to the bank's yuan banking services were only mediocre.

DBS Bank Hong Kong, which refused to disclose first-day figures, said it is satisfied with the number of RMB accounts opened on February 25.

Liu Chong Hing Bank's senior manager Brian Cheung said about 200 customers opened renminbi accounts at the bank on February 25, with saving accounts accounting for 60 percent while the remaining were fixed deposits.

With an attractive interest rate of 0.68 percent per annum and a minimum deposit of 10 yuan to open savings accounts, the bank has attracted a large number of new clients, accounting for half of the customers who made deposits yesterday, he said.

Cheung said its RMB savings deposit rate will remain the same for at least three months, in view of the positive response and significant number of new customers.

Meanwhile, Dah Sing Bank and MEBVAS Bank announced yesterday they will raise their interest rates for RMB fixed deposits to 0.8 percent per annum, while their savings account rate will remain 0.5 percent.

The banks said they will make adjustments periodically according to changes in the market situation.

The banking sector in Hong Kong said it expects interest rates for RMB deposit services at various local banks to even out after the initial stage, which still far exceeds the 0.001 percent given by a number of banks in the territory for Hong Kong dollar deposits.

(China Daily February 26, 2004)