Chinese banks were asked to rein in their credit card marketing campaigns

According to the latest report of Reuters China Banking Regulatory Commission (CBRC) ordered banks to rein in their credit card marketing amid concern over a rise in late payments in a country where paying with plastic is growing fast from a low base. Banks were told to stop promising clients some presents if they take out a credit card and to cease setting quotas for credit card sales staff. 

This order followed after last month the People's Bank of China disclosed that 4.97 billion yuan of credit card payments were at least 60 days late in the first six months, a jump of 133.1 percent from a year earlier. The 60-day delinquency ratio in China was 3.0 percent at the end of March. By comparison, American Express's 30-day delinquency rate in June was 4.4 percent.

Banks should also step up monitoring of card fraud at merchants and disclose more information to card holders, according to a notice on the Commission's website, www.cbrc.gov.cn. 

The number of credit cards issued in China reached 150 million at the end of March, up 42.9 percent from a year earlier, according to the central bank. 

Purchases via cards last year totalled 1.1 trillion yuan, or 4.8 percent of total retail sales, the banking regulator said.

Source: Forbes