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China Merchants Bank Co, the largest domestically traded lender on the Chinese mainland, said Tuesday it has received central bank approval to issue credit cards based on foreign currency to Chinese citizens.
The People's Bank of China granted permission for China Merchants to settle payments for foreign-currency credit cards issued by other banks and to issue credit cards that can be used overseas, the lender, based in the southern city of Shenzhen, said in a statement.
Chinese banks are seeking more revenue sources after eight interest rate cuts by the central bank since 1996 trimmed interest margins that provide three-quarters of their operating income.
China Merchants may be hoping to derive revenue from Chinese citizens traveling abroad, a group that numbered more than 1.2 million last year. Industrial and Commercial Bank of China, Bank of China, and Guangdong Development Bank have also been allowed to handle foreign-currency card transactions.
Chinese rules make a distinction between cards based on the yuan, which is not freely exchangeable, and foreign currency-based cards.
China Merchants raised 11 billion yuan (US$1.3 billion) in April in China's second-largest domestic share sale.
(Shanghai Daily September 11, 2002)
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