Mainland regulator allows foreign banks to accept deposits of 1m yuan before their incorporation At least five foreign banks have won mainland regulatory approval to offer limited yuan services to Chinese residents, a day after Beijing opened its retail banking sector wider to fulfil its World Trade Organisation obligations. HSBC, Standard Chartered, Citigroup, Hang Seng Bank and Bank of East Asia said yesterday the China Banking Regulatory Commission (CBRC) had approved their taking deposits from local residents for amounts of at least one million yuan before they had incorporated locally. The five banks, which are among eight lenders applying to incorporate locally, will be able to provide limited yuan services immediately as approval of any incorporation will take between three and six months. The other three banks are DBS Group, ABN Amro and Mizuho Corporate Bank. They could not be reached for comment yesterday. Johnson Fu Chi-king, Hang Seng's head of China business, said it would take two weeks before the lender could provide limited yuan services in its mainland branches. BEA executive director Chan Kay-cheung said its services would be available immediately after the necessary procedures were complete. HSBC has 13 mainland branches and 15 mainland sub-branches, Hang Seng seven branches and seven sub-branches, Standard Chartered 11 branches and six sub-branches and BEA 30 mainland branches and sub-branches. Foreign lenders have offered yuan services to international and local corporate customers on the mainland since the country joined the WTO in 2001. As locally incorporated entities, the foreign banks will be able to provide unrestricted yuan business, including individual deposits, and issue credit cards. Under CBRC guidelines, they are required to limit their loan-deposit ratios to 75 per cent by the end of 2011 and cannot make loans exceeding 25 per cent of their capital to a single borrower, a ceiling that will be lowered to 10 per cent after December 2009. While such restrictions on loans are in line with those imposed on domestic banks, it will be more difficult for foreign banks to broaden their deposit bases as the market has only gradually opened over the past few years and many of them have only a handful of branches.