CITIGROUP and Bank of East Asia said yesterday they have submitted applications to issue yuan-backed debit cards on China's mainland to deepen their presence.
China said last month it will allow overseas banks which have gained approval to do yuan retail services to issue yuan-denominated bank cards on a equal basis with their domestic rivals.
The China Banking Regulatory Commission, the watchdog, said on Monday it has started accepting applications regarding the issuance of such cards.
So far, four players - HSBC, Citigroup, BEA and Standard Chartered - can operate retail yuan business as the first batch of locally incorporated banks, a status which allows them to offer a full array of retail yuan business including bank card.
Standard Chartered Bank said it has not sent in its application yet and will do so once long-awaited bankcard rules are clear.
The UK bank is interested to do both debit and credit yuan-backed cards in the future and has already set up a team to research and prepare for the future launch of their own yuan bank cards.
HSBC was not available for immediate comment on the issue yesterday but it said on Monday it welcomes the introduction of the to-be-launched bankcard rules and will strengthen its cooperation with Bank of Communications on credit cards on the mainland. The bank will also consider other possibilities.
All four overseas banks said they are interested to offer yuan debit cards in China's mainland to better serve their clients.
Analysts noted the debit card may be a first step for overseas banks to gain a bigger market share in China while some may take further steps to issue credit cards.
Credit cards will be the most important consumer credit product after mortgages, with profit forecast to reach US$1.6 billion by 2013, accounting for 22 percent of total consumer credit profits, New York-based McKinsey & Consulting firm said.
Citigroup and HSBC have already teamed up with domestic partners as a short cut way to step into the nascent but lucrative market.
Citigroup has tied up with Shanghai Pudong Development Bank and the cooperation is noted as "satisfactory." HSBC has issued more than two million co-branded credit cards by joining hands with Shanghai-based BoCom, the country's fifth biggest lender.