Taipei, Feb. 4 (CNA) The domestic banking units (DBUs) of four banks in Taiwan will kick off yuan-denominated saving and transferring operations on Wednesday.
The domestic banking units of Bank of Taiwan, the Shanghai Commercial & Savings Bank, Standard Chartered Bank and Citibank Taiwan will take yuan deposits and make yuan remittances.
Shanghai Commercial & Savings Bank spokesman Alex Lin said that it has set the lowest threshold to count interests for demand deposits and time deposits, or 1 yuan and 500 yuan, respectively.
"We set the low threshold in the hope that the public can use the yuan as a tool to manage their wealth easily," Lin said.
Bank of Taiwan Chairman Liu Teng-cheng said the interest rates of the yuan-denominated time deposit in the DBU, is similar to the bank's offshore banking units (OBUs), or 1.1 percent for a one-year term.
The interest rates of the OBU are not to be compared with the 3.2 percent in mainland China, but is already higher than those in Hong Kong, which is less than one percent.
Taiwan and China signed a memorandum of understanding in late August to set up a currency clearing mechanism. Both sides have been gearing up since then for the new business.
In September, Bank of Taiwan's Shanghai Branch was appointed by the Taiwanese authorities as the clearing bank for the Taiwan dollar in China. In December, Bank of China's Taipei branch was named by the Chinese authorities as the clearing bank for the yuan in Taiwan.
Prior to the establishment of the currency clearing mechanism, only offshore banking units of banks in Taiwan are allowed to conduct yuan-denominated transactions.
Meanwhile, Cathay Life Insurance and Fubon Life will unveil the first yuan-denominated insurance policy on Wednesday.
(By Kao Chao-fen, Tien Yu-bin and Lilian Wu)