Laws of the People's Republic of China

the People's Bank of China

Supplementary Circular of the People's Bank of China on Relevant Issues Concerning the Operation of Renminbi Business by Mainland Banks and Hong Kong Banks

Yin Fa [2005] No. 359

The People's Bank of China Shanghai Head Office, all branches and business departments, the central sub-branches of the capital cities of all provinces (autonomous regions), the central sub-branches in the cities of Dalian, Qingdao, Ningbo, Xiamen and Shenzhen; the branches (foreign exchange administrative departments) of the State Administration of Foreign Exchange of all provinces, autonomous regions, and municipalities directly under the Central Government, and the branches of the State Administration of Foreign Exchange in the cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; all policy banks, wholly state-owned commercial banks, and joint-stock commercial banks; China UnionPay Co., Ltd:

According to Announcement [2005] No. 26 of the People's Bank of China (hereinafter referred to as the "Announcement") and other relevant legal provisions, the relevant issues on enlarging the scope for Mainland banks and Hong Kong banks to operate Renminbi business are hereby notifies as follows:

I.

For the money remitted via clearing banks by individuals holding a resident identity card of Hong Kong into the Mainland banks, with the remitters as payees, the maximum remittance for each remitter per day shall be raised from RMB 50,000 Yuan to RMB 80,000 Yuan. If the amount in Renminbi remitted from Hong Kong by the same remitter on the same day is more than 80,000 Yuan, the Mainland bank shall return the excessive part of the amount via the original clearing bank to the remitting bank in Hong Kong, and may not make the payment to the payee.

II.

The restriction on line of credit in Renminbi of the individual Renminbi bank card issued by a licensed Hong Kong bank or its subsidiaries may not be more than 100,000 Yuan, is abolished. Each card-issuing bank itself may decide the line of credit in Renminbi.

III.

A Mainland resident may use an individual Renminbi bank card issued by a Mainland commercial bank to make payments in respect of tourism and consumption in Hong Kong for shopping, catering, accommodation, traffic, communications, medical treatment, education, etc., provided that he does not use it to pay for capital or financial account transactions other than tourism or consumption, such as operative transactions, securities investments, and real estate, etc., or for such transactions as gambling prohibited by the Mainland laws and regulations. China UnionPay, the card-issuing bank and the acquiring bank shall, according to the "Announcement" and the relevant administrative provisions of the People's Bank of China, limit the codes of merchants and transactions.

IV.

An individual resident from Hong Kong may issue Renminbi checks within a limit of RMB 80,000 Yuan in each account per day to pay for consumptive expenditures inside Guangdong Province. Such Renminbi checks may not be assigned. The time for Hong Kong residents to issue Renminbi checks will be notified separately after completion of the work on relevant administrative measures and technical equipment.

V.

The present Circular shall go into effect as of the date of promulgation. Other relevant matters in respect of operation of Renminbi business by the Mainland banks and the Hong Kong banks shall still be governed by the "Circular of the People's Bank of China on the Relevant Issues Concerning the Operation of Renminbi Business by Mainland Banks and the Banks of Hong Kong and Macao" (Yin Fa [2004] No. 254 ). All branches and business departments of the People's Bank of China, and the central sub-branches of the capital cities of all provinces (autonomous regions) are requested to transmit the present Circular to the urban commercial banks, rural commercial banks, rural cooperative banks, urban and rural credit cooperatives, foreign banks within their respective jurisdictions.

People's Bank of China

December 4, 2005