Foreign investors can team up with their Chinese counterparts to establish settlement institutions soon, the People's Bank of China (PBC) announced yesterday.
"PBC has mapped out a regulation to manage settlement institutions, which will be in force soon," Su Ning, the central bank's vice president, told a press conference.
"As for the specific stake a foreign investor can have in a joint venture settlement institution, we will follow China's commitment to the World Trade Organization (WTO)," Su told China Daily but declined to give more information. "We are still seeking opinions," he said.
The central bank has no plan to establish a settlement bank for the moment, Su added.
Settlement institutions in China have grown in number in recent years with China UnionPay leading the way. Established in 2002, the Shanghai-based company aims to set up and run a national bank card information network.
"Settlement institutions help strengthen market competition, optimize resource allocation and improve services," Su said. "But as they are new financial organizations, we will make more efforts to standardize their operation and strengthen supervision to ensure the safety of capital."
China has seen a big jump in non-cash payment tools, and experts believe that there is great potential for the bankcard business.
At the end of June, over 160 institutions had issued more than 875 million cards, mostly debit cards.
The card business in the first half of the year was worth an estimated 24 trillion yuan (US$2.96 trillion).
Last year, China UnionPay extended its business to Singapore, Thailand, South Korea and the special administrative regions of Hong Kong and Macao.
In May, the central bank and other nine government departments released guidelines to boost the development of the bankcard business.
(China Daily September 6, 2005)
