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Citigroup to issue cash cards

(Reuters)
Updated: 2007-04-03 11:06

Citigroup Inc. plans to issue cash cards to account holders at its China unit which, if approved by regulators, would make it the first foreign bank to offer such cards independently in the world's fourth-largest economy.

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Citigroup, HSBC Holdings Plc. and two other foreign banks kicked off domestically incorporated Chinese units on Monday, becoming the first overseas lenders able to tap China's $2 trillion in personal savings.

Foreign banks that are not incorporated locally are not allowed to issue any type of bank cards independently, while foreign banks' domestically incorporated Chinese units still need to apply to regulators for approval of any card issuance.

Cash cards in China allow the user to withdraw cash from automatic teller machines (ATMs) or to make payments directly to merchants who are bank partners, within the amount deposited in the account.

Richard Stanley, chairman of Citibank (China) Co. Ltd., a wholly owned local unit of Citigroup, said he expected the ATM card would be issued very soon but gave no specific time frame, as it was still negotiating with regulators for approval.

Citigroup operates 18 outlets and 80 cash machines across China.

Stanley said the bank had no plans to issue its own credit card in the near future as it was already issuing a co-branded credit card with its partnerShanghaiPudong Development Bank, in which Citigroup has about a 4 percent stake.

Lee Ah Boon, Citigroup China's vice chairman, said the bank would also expand its cooperation with China Unionpay in bank cards in China, although he gave no details.