Minister of Finance Lee Yung-san (
While the move does not allow the direct movement of money between banks on the two sides of the Strait, it does speed up the electronic process by standardizing the transfers between OBUs and eliminate intermediaries.
"Now that [Beijing's] People's Bank of China (
SWIFT, the Society For Worldwide Interbank Financial Telecommunications, is a non-profit, cooperative organization that was created in 1973 to facilitate the exchange of payment messages around the world.
The OBUs of 15 large-scale Taiwanese and 12 foreign banks in Taiwan have been granted finance ministry approval to conduct direct transactions with mainland banks since March.
After five months of evaluation, China finally gave the go-ahead last Friday, allowing OBUs of its major banks -- including the People's Bank of China, the Commercial Bank of China (
More Taiwanese banks may soon be approved after submitting applications to the ministry, Lee said.
The 15 Taiwanese banks include Taiwan Cooperative Bank (
Domestic banks said that they had started accepting transactions yesterday -- the first trading day.
However, an official at Taiwan Cooperative, who preferred not to be identified, told the Taipei Times yesterday that no transactions had actually taken place since "some technical problems have yet to be worked out between banks across the Strait."
He added: "Taiwan's banking sector is far ahead of China by roughly two decades. [China's] network may not be extensive enough to provide the best service to Taiwanese doing business in China."
But in terms of cost and time, OBU transactions will certainly be a lot more efficient, he said.
Bankers reacted optimistically to the news yesterday, saying the opening will provide significant cost savings.
Chang Hwa president Mike Chang (
Chinatrust estimated that Taiwanese business people can save at least US$50 million per year in business costs, based on an estimated US$35 billion per year in cross-strait trade.
The bank added that, before yesterday, cross-strait money transfers via a third foreign bank cost an extra US$100 per transaction and took three working days to process.
Via SWIFT, the transaction time can be cut to one day.
Local Chinese-language media also reported yesterday that China may allow two or three Taiwanese banks to set up liaison offices there in late July or early August.
Chang Hwa and United World Chinese Commercial Bank (
When asked whether Chinese banks can also open here, Lee said yesterday that his ministry would have to propose relaxing legal restrictions first.
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