Rules that require foreign banks to incorporate locally before they can offer bankcards and yuan-denominated deposit service will be implemented by December 11, an official of the banking regulator said.

Passing the rule should be no problem by that date, Xu Feng, director of the banking supervision department at the China Banking Regulatory Commission, told a conference in Beijing yesterday.

The regulator has reached "more consensus" with foreign banks on the draft regulations, Xu said.

China is set to open its retail yuan business to overseas banks on December 11 under its World Trade Organization commitment.

The banking regulator has held two meetings in Shanghai and Beijing to get responses from overseas institutions about the draft.

Some of them have said it's hard to meet the requirement of having a deposit-to-loan ratio of 75 percent.

The regulator is likely to grant overseas banks a transition period to allow them to take in deposits to meet the requirement, earlier media reports said.

Overseas banks that don't incorporate locally will need three times more capital to offer yuan services to local individuals in the country, under draft rules given to Shanghai Daily in August.

Overseas banks, which are not locally incorporated, can only take fixed deposits of more than one million yuan (US$125,000), the draft noted.

China's US$1.9 trillion household savings are like the icing on the cake that most overseas banks can't easily overlook.

Overseas banks have 214 outlets nationwide now. The figure is the tip of the iceberg when compared with more than 70,000 run by their Chinese rivals.

Xiang Junbo, deputy governor of the People's Bank of China, said in September that international experience has shown that a "too fast" and "too much" opening up of the banking sector will do harm, rather than benefit, a country's economy.

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