Four overseas banks will be able to offer unlimited yuan services on Chinese mainland next month (April 2007) after they incorporate locally.
They include Hongkong And Shanghai Banking Corp., Citigroup Inc., Standard Chartered Bank and Bank of East Asia. The China Banking Regulatory Commission approved the first wave of overseas banks to open up the market as part of the country's commitment to join the World Trade Organization.
Some local people can't wait to try their services from overseas banks after having to line in queues for hours at domestic bank counters.
Before the incorporation, overseas banks could only take term deposits of more than one million yuan which restricted their clients.
What does local incorporation mean for the overseas banks?
A full array of retail yuan business to Chinese including mortgage, credit card and personal lending; if not only term deposit of more than one million yuan is allowed - more income channels.
What does local incorporation mean for retail consumers?
More products and services options from overseas banks.
Credit cards, mortgages and private banking are seen as lucrative sectors with China's emerging number of middle class and super rich clients.
Entering the market
Overseas banks to open as locally incorporated entities in April:
- Hongkong and Shanghai Banking Corp
- Citigroup Inc
- Bank of East Asia
- Standard Chartered Bank
Overseas banks preparing for local incorporation:
- Hang Seng Bank
- Mizuho Corporate Bank
- Bank of Tokyo-Mitsubishi UFJ
- DBS Bank
- ABM Amro Bank NV
- Wing Hang Bank
- Overseas-Chinese Banking Corp
- JP Morgan Chase & Co
Overseas banks applied for local incorporation:
- United Overseas Bank
- CITIC Ka Wah Bank
- Nanyang Commercial Bank