Citigroup Inc., the world's top financial services firm, will team up with China's interbank transaction network to allow increasingly mobile Chinese to withdraw cash -- within limits -- around the world.
The move dovetails with relaxations on the amount of cash that travelers can carry out of the country, while allowing Citigroup customers to draw money from 8,000 automatic teller machines now linked to China UnionPay Co.'s domestic network.
Holders of UnionPay cards would be allowed to withdraw up to 5,000 yuan (US$618) a day in the domestic equivalent from Citigroup cash machines in around 50 countries.
UnionPay executives said that the State Administration of Foreign Exchange would keep a close watch on how much money was actually withdrawn using their cards, to ensure that too much currency was not leaving the country.
"They will monitor your behavior very closely," said James Zhao, vice general manager of China UnioPay's international division, adding that the administration would order use of a card suspended if it spotted suspicious transactions.
Still, it would take up to six months for Citigroup to roll out the system with China UnionPay, he added.
China UnionPay Co. is the sole operator of China's interbank transaction network. Its 800 million cards are issued by most lenders in the country.
The yuan is convertible on the current account, which mainly covers trade and services, but is still restricted on the capital account, which covers investment and borrowing. Yet demand from travelers to take yuan out of the country has grown as more and more go abroad.
So, China lifted the ceiling on the amount of yuan that people can take out of the country to 20,000 yuan from 6,000 yuan, starting Jan. 1.
Citigroup itself is looking to increase its presence in a market with US$1.5 trillion in savings that is set to open wider to foreigners by the end of 2006, in line with commitments Beijing gave when it joined the World Trade Organization in 2001.
The US giant now cooperates with partner Pudong Development Bank, in which it owns almost 5 percent, and offers technical advisory services for cobranded credit cards, but is itself not yet allowed to offer a full-fledged service.
"That's just another step forward on the credit card side," William Rhodes, Citibank chairman, said in Shanghai. "This is going to become one of the most important consumer bank opportunities in China."
(Shenzhen Daily/Agencies September 15, 2005)
