Yuan deposits total 1.3 billion yuan on first day

By Amy Su  /  Staff reporter, with CNA

Fri, Feb 08, 2013 - Page 14

The central bank yesterday said about 1.3 billion Chinese yuan was deposited by Taiwanese on Wednesday, the first day local banks were allowed to operate yuan business.

The central bank’s remark came as Chinese-language media reports said First Commercial Bank (第一銀行) led its local peers by taking 350 million yuan in deposits on Wednesday followed by Mega International Commercial Bank (兆豐國際商銀), with 250 million yuan in deposits.

Other banks absorbed deposits of up to 150 million yuan each on Wednesday, media reports said. A total of 46 banks launched their yuan-denominated business that day, the reports said.

The central bank said all lenders should submit monthly reports on their yuan-denominated transactions, such as deposits, lending and remittances. The central bank is expected to announce next month the exact amount of yuan deposits for this month.

Local banks are offering relatively high interest rates on yuan-denominated savings accounts. First Commercial is offering a 2.38 percent interest rate on 12-month yuan time deposits, while Mega Bank is offering 1.10 percent. By comparison, Bank of China’s (中國銀行) interest rate on such deposits in Hong Kong is 0.6 percent.

However, the central bank said the banks should not mislead their customers on interest rates. For example, one bank announced it would offer a 6.66 percent interest rate on a preferential three-month yuan time deposit package, but the 6.66 percent rate will actually only apply in the third month, the central bank said. The rate for the first and second month would be just 0.75 percent, it said.

Meanwhile, the central bank said a foreign currency settlement platform meeting the Society for Worldwide Interbank Financial Telecommunications’s standards would be implemented next month. The platform will conduct US dollar transfers in the preliminary stage, and later expand to cover transactions denominated in the yuan and other currencies.