OpinionChinese banks look ahead to easing of credit card market
Country’s central bank will introduce deregulation measures to the cost of borrowing money on January 1.
China’s banks will have mixed results from central bank deregulation next year that will allow them more freedom in their credit card business, analysts said.
The People’s Bank of China, the central bank for the world’s second-largest economy, said on April 15 a partial interest rate liberalisation and the removal of certain requirements on credit card operations will take effect from the new year.
The PBOC said the moves were aimed at improving services offered by credit card issuers, to encourage market competition, and develop a healthy credit card market.
Yuan Lin, an analyst at Bank of China International said the gaps between banks’ credit-card business market shares should continue to widen after the new policy is implemented on January 1.
The policy allow banks to offer an up to a 30 per cent discount on the credit-card lending rate — currently 0.05 per cent a day — and raise daily cash withdraw limits to 10,000 yuan(HK$11,994 ) from a previous 2,000 yuan (HK$2,398).
The central bank will also remove certain requirements on credit card business.