Banks offer benefits to attract yuan investors
By Linger Liu, The China PostTAIPEI, Taiwan -- Taiwan banks yesterday officially began offering Chinese yuan-based exchange services, the Central Bank of the Republic of China (Taiwan) said.
February 7, 2013, 11:23 am TWN
Forty-six domestic and international banks in Taiwan are offering Chinese yuan savings accounts thanks to an agreement between the central bank and its Chinese counterpart, the Bank of China.
Central Banks in Taiwan and China Comparison
The central bank said so far there are around 13 banks in the mainland that are currently seeking to launch financial services using the New Taiwan dollar.
Regarding Taiwan currency's circulation in China, the central bank said currently demand from the mainland is mainly for tourism services. Now that the agreement has taken effect, Chinese customers exchange cash at contracted banks in mainland China.
Previously only Bank of China branches in southern China, where more Taiwanese investors and enterprises are located, could provide New Taiwan dollar transaction services.
There is growing demand in Taiwan for Chinese yuan services for the purposes of investment, imports, exports and other business services, according to Taiwan's central bank.
In China there is a relatively lower demand for investment and deposit services using the New Taiwan dollar.
The Chinese yuan clearance mechanism in Taiwan will benefit the nation's local and offshore banking units, helping diversify Chinese yuan investment and savings services, the central bank said.
Taiwan Domestic Banking Service
The Bank of Taiwan (台灣銀行) said that NT$25 million in cash arrived in Shanghai for upcoming financial operations.
It said most of the cash is in NT$2,000 notes. It expects soon to begin savings, deposit and financial product services using the New Taiwan dollars in the mainland, said the bank.
Local Taiwan bank Yuanta Bank (元大銀行) said it is offering banking clients a three-month fixed-term interest rate of 3.5 percent for deposits valued at 10,000 yuan and more.
Bank SinoPac (永豐銀行) said it is offering a three-month, term-savings interest of 6.66 percent. The rate in the first and second months is set at 0.75 percent, and rises to 6.66 percent in the third month, averaging 2.72 percent, said SinoPac.
First Commercial Bank (第一銀行) offers a three-month term-savings rates of 6.68 percent for savings of at least 100,000 yuan.
The rate is 0.88 percent and 0.98 percent in the first and second months, respectively. The average savings rate for three months is 2.847 percent, said First Commercial Bank.