The China Banking Regulatory Commission (CBRC) began accepting bank card applications from overseas banks on June 4. Foreign incorporated banks qualified for renminbi retail business are allowed to issue renminbi bank cards in accordance with CBRC requirements and related operational and technical standards.

For commercial banks, bank cards are major carriers of retail banking and personal financial services. Before this new CBRC decision, however, foreign banks couldn't issue bank cards independently and could only issue joint-brand bank cards with local commercial banks.

At present, only four foreign-funded incorporated banks are qualified for the application, including HSBC, Standard Charted Bank, Bank of East Asia (China) Ltd. and Citibank. All of them submitted applications to the CBRC on June 7.

This means foreign banks will enjoy the same treatment as Chinese banks, fulfilling China's WTO commitments as well as related stipulations in the country's Regulations on Administration of Foreign-Funded Banks.

"The practice that permits foreign banks to independently issue renminbi bank cards will commence fully fledged competition," said Guo Tianyong, Director of the Chinese Banking Research Center in the Central Business and Finance University.

Reactions vary

It has been a long-cherished wish for foreign banks to issue renminbi bank cards. They are not only a means to target their customers but also a platform to provide a full range of services in the coming future.

It was reported that a majority of foreign banks had negotiated with the China UnionPay Co. Ltd., the country's only operator of a unified trans-bank information switching network, about bank switching services. China UnionPay would possibly become the sole provider of switching services within China for foreign banks' renminbi bank cards.

CBRC's Assistant Chairman Wang Zhaoxing said they would make specific stipulations on foreign banks' issuance of renminbi bank cards in the new Regulations for the Administration of Bank Cards. The action, expected soon, will symbolize a mature time for foreign banks to introduce renminbi bank card services.

Yet, as some foreign banks issued joint-brand credit cards with Chinese banks, they can rival their former partners when issuing their own cards. As a result, they are very prudent with the new policy.

"We look forward to the debut of the regulations on bank cards," said HSBC Spokeswoman Zhang Dandan. HSBC has been working in cooperation with its strategic partner, Bank of Communications, with regard to credit cards and has issued over 2 million co-branded dual-currency credit cards, backed by HSBC management and technology.

"The mainland market enjoys huge growth potential in credit card business, and we will continue credit card cooperation with the Bank of Communications in the future," said Zhang, while stressing the possibility of independent issuance of bank cards in line with the new regulations.

Citibank is reluctant to make any comment on the issue for the same consideration. Li Yawen, Vice President of Citibank China, said, "We will make decisions on whether to issue independent cards after the supervisor introduces the new regulations, and at present, we are very satisfied with our cooperation with the Shanghai Pudong Development Bank."

Standard Chartered Bank and Bank of East Asia, however, are very active in planning renminbi bank card business as none of them have ever cooperated with local commercial banks in issuing credit cards. Standard Chartered Bank (China) Spokeswoman Qian Jing disclosed that the bank had designated a team responsible for the design and issue of renminbi bank cards and is coordinating and exchanging positively with the supervisor.