Alfred Lee, The China Post
More than 10 local banks have applied to the Ministry of Finance (MOF) for permission to undertake cross-strait banking since mainland China announced that it would introduce regulations in mid September governing the operations of Taiwan banks in the mainland. After a bank is approved by the MOF to undertake cross-strait banking, the Taiwan bank can deal directly with banks invested by mainland China or with foreign-invested banks in the mainland. The Taiwan bank can issue letters of credit, conduct wire transfers, and receive deposits on behalf of its customers who deal with business entities in mainland China.
In addition to offering services to Taiwan businessmen, these banks are also allowed to offer their services to corporate entities and individuals in mainland China.
All transactions between these banks and their customers are conducted in foreign currencies. They are not allowed to undertake NT dollar or renminbi transactions with cross-strait accounts.
The finance ministry has recently eased restrictions on Taiwan banks engaging in overseas banking business. The ministry no longer requests that these banks provide a list of the names of the mainland China banks with which they maintain banking relations. Previously the finance ministry had requested that Taiwan banks with branches in Hong Kong provide a list of the names of the mainland China banks with which they maintain banking relations. At the recent Economic Development Advisory Council, representatives made strong requests for the government to ease controls on cross-strait banking so that Taiwan businessmen can do business in mainland China with the desired banking support.