THE Bank of East Asia said yesterday it has become the first overseas lender to receive government approval to issue yuan-backed debit cards on the Chinese mainland.

The Hong Kong-based bank said that its debit card system has passed an evaluation by the People's Bank of China and it is working with China UnionPay to join its network soon, according to an e-mailed statement.

The bank didn't say when it will start to issue the yuan debit cards but that it will finish preparations for the launch as soon as possible, according to the statement.

Industry sources said earlier that BEA has outsourced card issuing to UnionPay's subsidiary, China UnionPay Data, an e-payment outsourcing firm. UnionPay is the mainland's sole bank card system operator.

In June 2007, BEA became one of the first overseas banks to apply to issue debit cards on the mainland. It obtained approval in September from the China Banking Regulatory Commission.

BEA has set up a bank card data center in Shenzhen, Guangdong Province, and said earlier that it hoped to launch its debit cards this year.

Overseas lenders including HSBC, Citigroup and Standard Chartered have applied to issue yuan bank cards as they step up efforts to compete with domestic rivals.

The mainland authorities have yet to give a timetable over when foreign lenders can issue credit cards. Domestic banks can issue credit cards three years after they launch debit cards.