|Four more cities to offer overseas banks business in RMB(11/06/03)|
A senior official with China's banking watchdog said Thursday that China will allow four more cities to offer overseas banks business in Renminbi (RMB), the Chinese currency, from Dec. 1.
The official with China Banking Regulatory Commission, who declined to be named, noted that overseas-funded financial institutions will be permitted to conduct business in the Chinese currency in three additional cities and one municipality.
They are Jinan, capital of east China's Shandong province, Fuzhou, capital of eastern Fujian province, Chengdu, capital of southwestern Sichuan province, and Chongqing Municipality also in southwest China.
The move is aimed to comply with the promise China had made when joining the World Trade Organization in late 2001, under which China fulfill in two years' time after its entry into the organization, said the official.
Overseas financial institutions in these four cities may submit their applications for doing Chinese yuan service from Dec. 1 to local branches of the banking regulatory commission for approval.
Foreign financial institutions which have been authorized to conduct business in Chinese yuan elsewhere can also expand their business to the four cities.
Also from Dec. 1, the official noted, overseas financial institutions allowed to conduct business in Chinese currency may offer services in yuan to local Chinese companies in areas, where they are authorized to conduct business in Chinese currency, said the official.
Overseas financial institutions must meet a set of requirements before they are authorized to provide Chinese currency services for local businesses, acknowledged the official.
As part of the requirements, the applicants have to be profitable for at least two years before the date of application with good corporate governance structure, stable risk control system and effective anti- money-laundering measures, said the spokesman.
City Bank NA, the Hong Kong and Shanghai Banking Corporation, the Bank of Tokyo - Mitsubishi, and the Industrial Bank of Japan became the first foreign banks authorized by China to do business in RMB yuan on Chinese mainland in 1996.
Later on, China opened Shenzhen, a boomtown bordering Hong Kong,Tianjin Municipality, north China, and Dalian City, in northeast China, to overseas financial institutions for doing business in Chinese currency.