On March 21, Citibank became the first foreign bank to enter the once protected business in Shanghai. The bank's board chairman and CEO, Sanford I. Weil, made his appearance on the historic day for his bank and opened an account for its first Chinese customer, Tang Haisong, CEO of etang.com.

After Citibank, the Hongkong and Shanghai Banking Corporation Limited (HSBC) was given green light to offer this service to local citizens and companies in its Shanghai branch.

These banks said they would concentrate on elite customers and enterprises. However, Chinese banks are trying to hold on to ordinary customers. Over 90 billion US dollars of individual savings are deposited in foreign currency accounts at Chinese banks.

In the Shanghai branch of the Industrial and Commercial Bank of China (ICBC), a director of foreign currency services expressed his concern over the competition. "Although Chinese banks have absolute advantages in service scope and networks, our competitors are top financial dealers given their experience," he said.

The banker, who declined to offer his name, warned that if Chinese banks failed to catch up in next couple of years, while foreign banks were still probing this potential market, they were sure to lose their grip of their share.

His suggestion that Chinese banks should expand this market is repeated in Shanghai. On April 1, the ICBC, the Bank of China and the Bank of Communications announced lucrative policies such as reductions in service charges.

Meanwhile, major Chinese banks have started collaborating with international institutes to provide new service products, in a bid to attract more customers. Among them, ICBC signed an agreement with Money Gram to offer a fast global remittance service.

(Xinhua News Agency July 13, 2002)