China regulates forex bank card business

CCTV.COM (06.01 2003 13:33)

    China's State Administration of Foreign Exchange has issued a circular on the administration of bank card business in forex exchanges. The regulations aim to standardize and encourage the growth of this business. The new procedures will come into effect on June 1.

    The circular provided detailed regulations on related issues concerning forex bank cards issued by both domestic and overseas banks. The safe, fast and convenient payment tool can be used in other countries and regions and is conducive to decreasing cash payments and will be effective in preventing illegal forex trading.

    " I think what prompted the new regulations is the fast development of bank cards, unlike the former ones that tended to control the foreign exchange market. After the WTO membership, the areas for foreign exchange utilization in China are expanding, especially in domestic consumption and international tourism. With this new situation, there was a need to improve the utilization of forex banking cards," said Song Guoliang, professor of Finance Institute of UIBE.

    The administration also said that holders of forex bank cards issued outside China are now entitled to make withdrawals in Renminbi yuan. Holders of domestically-issued forex cards can either withdraw Renminbi yuan or foreign currencies at bank outlets, but cannot withdraw foreign currency from ATMs.

    When travelling abroad, such cardholders are subject to a 1,000 US dollars daily withdrawal limit and a 5,000 monthly ceiling. This is aimed at preventing card holders from using cash for illegal purposes.

    "Comparatively speaking, the forex banking card business in China is in the initial stage and lags behind international levels. The major reason for that is the strict control system in China over past years, especially in the domestic consumption sector, like payment settlement. The other factor is the outdated environment for the utilization of forex banking cards, for example the less advanced banking service system," said Song Guoliang, professor of Finance Institute of UIBE.

    Credit card use in China is expected to grow by 10 times, to more than 10 million customers within five years. China's booming outbound travel industry will play a vital role in boosting the growth of China's bank card sector.

    Source: CCTV

Editor:Liu