China to allow foreign-funded banks for renminbi business

Beijing, Nov 29 | Updated: Nov 30 2006, 09:14am hrs
China will approve foreign-funded banks to offer Renminbi (RMB) business for its citizens within three months of implementation of new banking regulations, the banking watchdog has announced.

On December 11, the new regulations on the administration of foreign-funded banks will take effect, marking the full opening of the countrys banking sector to foreign competitors, an official with China Banking Regulatory Commission (CBRC) said.

As per regulations, China will allow foreign-funded banks to conduct RMB business for its citizens as committed to the World Trade Organisation (WTO) within three months of implementation. The government would also remove regional and other restrictions on foreign-funded banks, giving them the same treatment as Chinese banks, the official said.

The regulations state that Chinese branches of foreign banks remain banned from engaging in RMB services with Chinese citizens unless an individual makes a minimum fixed deposit of one million yuan ($127,000) with the approval of banking regulatory body.

Foreign-funded banks will enjoy the same treatment with domestic banks when acting as insurance agencies. Standards for both domestic and foreign banks remain the same in terms of registered capital, operating funds, information disclosure and affiliated deals, he said.