Taiwan banks start providing yuan services

Forty-six banks in Taiwan started to provide yuan services on Wednesday, after the yuan clearing system kicked off there.

The services include yuan deposits, remittance and lending. Taiwan's central bank said on Tuesday that it will allow 46 lenders on the island to process the services.

The banks may also buy yuan-denominated "Dim Sum" bonds in Hong Kong, and participate in the bond market on the mainland if approved.

The move comes after the central banks of the Chinese mainland and Taiwan agreed to develop cross-border yuan business. In January, the People's Bank of China said that the Bank of China's Taipei Branch would serve as the yuan-clearing bank in Taiwan.

Financial institutions across the Straits can choose to process yuan-denominated cross-border settlements through an agent bank or the clearing bank, the PBOC said.

Taiwan's central bank also announced rules for Taiwan's yuan business for domestic banking units, which sets the daily conversion limit for individuals at 20,000 yuan ($3,185).

Taiwan residents will be allowed to remit up to 80,000 yuan onshore daily, limited to current account transactions, and banks will be able to lend to individuals and local companies.

However, the two sides have not yet signed a bilateral currency-swap agreement.