Detailed rules on governing foreign banks which came into force
Friday was a milestone in the history of China's banking industry,
foreign bankers claimed.
Betty Nah, chief executive officer of the Beijing branch of BNP
Paribas, said: "The implementation of the rules is a much awaited
occasion for Chinese and foreign banks.''
"It is a milestone.''
The Chinese Government should continue to maintain a clear and
stable regulated banking environment to further encourage foreign
banks to continue to invest and participate in the development of
China's banking sector, she said.
Richard Stanley, country corporate officer of Citibank China, said
the implementation of the rules is an important measure taken by
the Chinese Government to further open its banking sector.
Foreign media have repeatedly expressed doubts as to whether China
would carry out its promises to the World Trade Organization (WTO),
Stanley said.
"The implementation of the rules proved their doubts were
groundless,'' he said.
Citibank will continue to expand its business in China in the
coming years, he added.
Raymond Yu, head of China Division of the Bank of East Asia Ltd,
said the rules stipulated foreign banks could do more business in
the Chinese mainland.
"They are facing bigger development opportunities,'' he said.
However, some other foreign banks expressed their
disappointment.
The rules and the foreign banks' expectations have a certain gap,
said one representative of the foreign banks, who declined to be
identified.
According to the rules published on Wednesday, foreign bank
branches must have at least 600 million yuan (US$$72.3 million) in
operating capital to qualify to conduct a wide range of
businesses.
Qualified foreign banks will be able to conduct all forms of
foreign and domestic currency business with foreign and Chinese
firms, and with individuals.
Of
the minimum 600 million yuan (US$72.3 million) requirement, the
branch must maintain at least 400 million yuan (US$48.2 million) in
domestic currency and at least 200 million yuan (US$24.1 million)
in foreign currency.
Solely foreign-funded banks and Sino-foreign joint venture banks
must maintain a minimum registered capital of 1 billion yuan
(US$120 million), 60 percent of which in yuan and the rest in hard
currencies.
Solely foreign-funded and joint venture non-bank financial
companies must have a minimum registered capital of 700 million
yuan (US$84.3 million) -- at least 400 million yuan (US$48.2
million) and the equivalent of 300 million yuan (US$36.1 million)
in hard currency.
China pledged to allow more foreign financial institutions into the
banking sector following its WTO membership on December 11.
It
has pledged to let foreign banks conduct yuan business with
domestic firms in two years after entering the WTO and with Chinese
individuals within five years.
The rules also stated foreign banks with two or more branches in
China must appoint a main branch to combine the financial
statements of all their branches, giving a complete picture of
their operations in the country.
(China
Daily February 2, 2002)