granted permission for China Merchants to settle payments for foreign-currency credit cards issued by other banks and to issue credit cards that can be used overseas, the lender, based in the southern city of Shenzhen, said in a statement.
Chinese banks are seeking more revenue sources after eight interest rate cuts by the central bank since 1996 trimmed interest margins that provide three-quarters of their operating income.
China Merchants may be hoping to derive revenue from Chinese citizens traveling abroad, a group that numbered more than 1.2 million last year. Industrial and Commercial Bank of China, Bank of China, and Guangdong Development Bank have also been allowed to handle foreign-currency card transactions.
Chinese rules make a distinction between cards based on the yuan, which is not freely exchangeable, and foreign currency-based cards.
China Merchants raised 11 billion yuan (US$1.3 billion) in April in China's second-largest domestic share sale.
(Shanghai Daily September 11, 2002)
