BOC to issue Hong Kong's first yuan credit and debit cards today
Hong Kong residents can apply for yuan-denomination credit and debit cards from today - the first issued in the city.
The cards, to be issued by the Bank of China (Hong Kong) (BOCHK), will allow cardholders to pay for hotel and retail purchases at 400,000 mainland outlets, while the debit cards will enable users to make cash withdrawals from 50,000 automatic teller machines (ATMs) on the mainland.
'It is now much more convenient for Hong Kong people who need to travel frequently between Hong Kong and the mainland for business, work or pleasure,' BOCHK chief executive He Guangbei said yesterday.
The repayment on yuan credit cards can be made in either Hong Kong dollars or yuan.
BOCHK also offers an overdraft facility of up to 100,000 yuan to its credit card holders.
The interest rate charges on the yuan credit card will be 18 per cent, more or less the average rate the bank charges on Hong Kong dollar cards.
While local lenders are not yet allowed to provide yuan loans to the Hong Kong public, credit cards appear to be an exception - where limited credit is given under the Closer Economic Partnership Arrangement (Cepa).
Most Hong Kong banks have been providing yuan banking since February, taking deposits and doing remittances and money exchanges. Sixteen Hong Kong banks have signed up with China UnionPay to provide 'merchant-acquiring' business - or the settlement of credit card bills with merchants and card users.
More and more mainlanders have been allowed to travel individually to Hong Kong, with the eligible number now 150 million, thus providing big business for banks.
The May Day holiday is expected to be a boon for 'merchant-acquiring' business for Hong Kong lenders.
Shanghai-based UnionPay manages the mainland's bank-card payment and clearance system.
BOCHK is the locally listed arm of the state-owned Bank of China, the mainland's biggest foreign exchange bank.
