Chinese Banks To Charge Penalty Fees For Small Deposits

by Philip Morton, Investors Offshore.com

31 May 2002

The South China Morning Post reported yesterday that banks on the Chinese mainland are taking the lead from their Hong Kong counterparts, and are to introduce penalty fees on small deposits.

Speaking on Wednesday, the Vice-President of the Industrial and Commercial Bank of China (ICBC), Li Lihui revealed that of ICBC's 100 million individual accounts and 400,000 business accounts, around 20.18 million contain less than 100 yuan (HK$93.72).

Revealing that management costs are the same for large or small account deposits, Mr Li announced that henceforth his bank will be concentrating on larger accounts, and according to the SCMP report, called on other domestic Chinese banks to join the ICBC in charging penalty fees for small dormant deposits.

The majority of local banks in the SAR began the practice of charging penalty, or 'service' fees to small depositors in 2001, in the run-up to the scrapping of the regulated ceiling on savings deposits in July of last year.

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