China Minsheng Bank, the mainland's sole private financial institution, has announced that it is now able to send funds directly to Taiwanese banks, bypassing the traditional route through a third port. A bank spokeswoman yesterday said it had clinched agreements with more than 10 Taiwanese financial institutions for direct remittance businesses. The move came after Beijing allowed direct fund transfers between banks across the Taiwan Strait, she said. 'It will enhance our service coverage and competitiveness as other domestic banks are offering their clients similar services,' she said. Earlier this month, the mainland's largest commercial financial institution, Industrial and Commercial Bank of China, said it had agreements in place with more than 20 Taiwanese banks and another dozen foreign banks with branches in Taiwan for direct remittance business. Banking funds had previously been prevented from flowing directly between Taiwan and the mainland. Instead, banks would remit funds through a third port, usually Hong Kong or the United States. The spokeswoman said the bank was unlikely to reap substantial profits from the new business. However, she said customers would benefit from savings in costs and the time taken for transfers to be completed. The accumulated investment value from Taiwan firms in the mainland was estimated at more than US$60 billion as of last year, according to mainland media. Remittances by private individuals were said to be more than US$1 billion a year, the mainland reports said. Earlier this month, Taiwan's leading private financial institution, Chinatrust Commercial Bank, led the charge by signing an agreement with the mainland's Agricultural Bank of China for direct remittances between the two institutions. It is believed Bank of China will require that Taiwanese banks accept Beijing's 'one China' policy in writing before going ahead with the direct-remittance agreements. However, Taiwan's Ministry of Finance has retaliated by labelling the move as inappropriate and politicised. The ministry has urged Taiwan banks not to sign such agreements. The Taiwanese government earlier eased its restrictions on cross-strait funds transfers, with Beijing only recently following suit.
