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Peggy Sito

United States financial giant Citibank has scrapped transaction fees charged to customers in China for cash US dollar deposits.

The bank said the adjustments reflected market conditions and client opinion.

Before the adjustment, customers in the mainland depositing more than US$3,000 in cash were charged 0.25 per cent per transaction.

Citibank head of consumer banking business in China, Linda Wong, said the deposit fees would end but charges would still be made for US dollar cash withdrawals.

Ms Wong said it was a strategic move to cater for mainland clients.

Citibank is one of the foreign banks to recently obtain Beijing's approval to operate a foreign currency business for individuals on the mainland.

Beijing promised to fully open the banking industry to foreign players in the next five years to comply with World Trade Organisation entry requirements. China joined the global trade body on December 11 last year.

Citibank's revised service charge scheme was in line with a move by other foreign banks operating in China.

HSBC said it charged customers 0.25 per cent per transaction for cash withdrawals, but there were no fees for cash deposits.

Mainland newspapers reported that Standard Chartered did not charge service fees for cash deposits. The bank was unavailable for comment yesterday.

Ms Wong said it was not a large change in the bank's service charges scheme.

She said Citibank would continue to levy a monthly account maintenance fee of 50 yuan (about HK$47) on customers with a deposit balance of less than US$5,000.

Earlier, Shanghai's Pudong District Court had accepted the case of a law firm clerk who complained Citibank charged him a monthly service fee.

The move had ignited a debate in China over whether mainland banks should impose service charges on small account holders.

As a result, the People's Bank of China stepped in to protect small account holders by blocking domestic commercial banks from trying to impose penalties.

The central bank said charging depositors was against the Commercial Bank Law. But foreign banks were allowed to make their own decision on charges as they were covered by other rules, the central bank has said.

HSBC said customers with a balance below US$2,000 would be charged US$20 or the equivalent every six months.



Citibank ends charge for mainland US dollar cash deposits