THE government has no immediate plan to allow foreign banks to issue bank cards independently, said Hu Pingxi, deputy head of the People’s Bank of China’s Shanghai headquarters, yesterday.

“Chinese banks have invested heavily in building the existing data platform for bank-card sales and operations,’’ Hu said. “If foreign banks want to share that database they need to share the cost as well.’’

At present, foreign banks can only issue cards jointly with local institutions. China plans to have 30 percent of big cities’ retail sales paid through debit and credit cards this year, up from 10 percent in 2005. By selling bank cards, foreign lenders, whose combined branches amount to about 1 percent of China’s four biggest State-owned banks, can expand coverage.

The government will open its financial-service sector to foreign banks in a step-by-step manner, Hu said.

The central bank’s Shanghai headquarters hasn’t yet obtained regulatory approval to start a pilot program in the Pudong area to convert currencies, Hu said. The bank applied for the approval more than two years ago.

Smaller banks in Shanghai are facing "liquidity problems" after frequent reserve ratio increases last year, Hu said. "Medium and small-sized banks also find it difficult to borrow from other banks in the inter-bank market," he said.  (SD-Agencies)