Getting a credit card may not be as simple as it is now.
A top official of the People's Bank of China has asked financial institutions across the country to "carefully check the applicant's identity and their previous credit records before issuing them credit cards".
Su Ning, vice-president of the central bank, further urged banks to monitor card transactions in real time and tighten control of self-transfer services.
"Anyone who wants to avail of such services must sign a written agreement with the bank," Su said in a statement published on the People's Bank of China's website late Wednesday.
The statement comes in the wake of an increasing number of financial crimes being reported across the country in recent times.
Su said the central bank strongly recommends that banks issue smart cards, which are not easy to duplicate, instead of the current magnetic strip cards.
Latest figures available from the Ministry of Public Security show that from April to September last year, police across the country handled 3,672 credit card-related crimes, up 140 percent year-on-year, involving about 176 million yuan ($25 million).
Behind the rising number of card-related frauds is a rapid growth of plastic purchases, despite the stereotype that Chinese prefer dealing in hard cash, Su said.
Chinese banks have so far issued 1.8 billion credit cards, with each Chinese having more than one on average. The figure was only 380 million in 2001. Money transferred through bankcards reached 116 trillion yuan in 2007, compared with 8 trillion in 2001, the central bank said.
"Using cards to purchase anything and everything is becoming very popular in the country," Su said in the statement.
To tackle credit card cash out, the Supreme People's Court (SPC) is also drafting a judicial interpretation on how to handle such cases, China Business News reported yesterday.
Hu Yunteng, director of the applied jurisprudence institute under the SPC, was quoted as saying that the current legal blank makes it difficult for courts to handle such cases.
Guo Tianyong, director of the research center of the Chinese banking industry with the Central University of Finance and Economics said banks should be careful before issuing the credit cards to applicants.
"It's time for banks to better regulate their credit cards, or they'll see soaring bad loans in the next few years," he said.
Source: China Daily
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