Chinese regulators announced Thursday that overseas banks will
be allowed to provide renminbi (RMB) services for Chinese
enterprises beginning next month.
The China Banking Regulatory Commission said that effective
December 1, foreign financial institutions, subject to the CBRC's
approval, may provide RMB services for domestic enterprises.
Overseas banks can apply to conduct the local currency business
for Chinese companies in regions where foreign financial
institutions have already been permitted to offer RMB banking
services, said the CBRC in its statement.
Currently, foreign banks can only provide RMB businesses to
foreign-funded enterprises and non-Chinese residents in Shanghai,
Shenzhen, Tianjin, Dalian, Guangzhou, Zhuhai, Qingdao, Nanjing and
Wuhan.
The CBRC also announced yesterday that it will open four
additional mainland cities, namely Jinan, Fuzhou, Chengdu and
Chongqing, for overseas banks to conduct RMB businesses.
"Foreign financial institutions that are already authorized to
operate RMB businesses may apply to provide RMB services for
Chinese enterprises," the CBRC said in a statement.
Only overseas banks which have reported profits for two
consecutive years prior to the application and meet other
requirements, such as good corporate governance, sound risk
management and internal controls and efficient controls on money
laundering, are qualified to apply for the RMB business, according
to the CBRC.
"Upon entry into the WTO, China was committed to allowing
foreign financial institutions to provide RMB services for Chinese
enterprises," said the statement.
"The CBRC will continue to push forward China's opening up of
its banking industry on a stable pace and remove some geographic
and client limits on overseas banks' RMB businesses," said the
CBRC.
Yesterday's announcement was not much of a surprise for overseas
banks working on China's mainland.
"We knew that China will open the sector to overseas banks at
this time, two years after its entry into the WTO, as it promised
to the international trade club," said Zhang Dandan, a spokeswoman
for the Hong Kong and Shanghai Banking Corp.
(eastday.com November 7, 2003)