960405

China unveils

rules to regulate

credit cards

BEIJING: China's central bank on Friday unveiled rules aimed at regulating the country's rapidly growing credit card market, the Financial News said.

The rules, issued by the People's Bank of China, went into effect on a trial basis from April 1, the newspaper said.

The central bank drafted the rules to curb a rising number of irregularities and crimes, including people using credit cards instead of cash to speculate in commodities and intentionally abusing overdrafts, it said.

The People's Bank will supervise the issuance of credit cards by Chinese commercial banks and branches of foreign financial institutions, it said. More than 12 million credit cards had been issued in China by the end of 1995.

Under the rules, commercial banks would be fined up to 300,000 yuan if they issued credit cards without the approval of the central bank.

Representative offices of foreign financial institutions in China are barred from issuing cards and face fines of up to 500,000 yuan if they do so, the rules said.

Financial institutions faced closure or fines of up to 100,000 yuan if they reduced fees charged to card holders or set their own interest rates.

Bank employees and card holders involved in fraud and those who counterfeit or steal credit cards faced imprisonment, the newspaper said.

China aims to have 200 million credit cards in circulation by 2000.-Reuter