Foreign banks take first local currency deposits

Four foreign banks – Citigroup, HSBC, Standard Chartered and Bank of East Asia – began taking local currency deposits Monday, state media reported. The banks now have access to China's US$2 trillion in domestic household savings, although they are expected to focus mainly on the country's wealthiest customers. The banking sector was opened to foreign competition as part of the reforms required for China to join the WTO. However, to enjoy maximum market access, the foreign banks had to restructure their China operations as locally incorporated subsidiaries. Bank of East Asia is offering potential customers fee-free banking, provided their balance exceeds RMB5,000 (US$650). They will be charged RMB10 (US$1.30) per month if deposits fall below this level. Customers of the other three banks will pay monthly management fees of RMB50-100 (US$6.5-13) on balances below RMB80,000-100,000 (US$10,300-13,000).