(Yicai Global) Feb. 22 -- Commercial lenders and rural credit cooperatives with physical branches in China must keep handling cash, according to a deputy governor of the central bank.
"Cash deposit and withdrawal is the most basic business of banks," Fan Yifei at the People’s Bank of China said during a joint symposium held by the central bank and the China Banking and Insurance Regulatory Commission yesterday. Financial institutions should not escape it for any reason such as business transformation or cost or risk control, Fan added.
Some branch of certain institutions, including agricultural credit cooperatives, foreign banks, and some large state-owned lenders, have stopped managing cash, according to the PBOC's preliminary survey.
Cash is a non-profit basic public product, said Fan. Cash service is also the most basic business for a bank, he added. Banking and financial institutions are legally required to guarantee cash services, according to the official.
A person at China Construction Bank said to Yicai Global that cash management is irreplaceable even though costly. Cash transactions still account for about 70 percent of all of CCB's transactional business.
In the past two years, CCB's cash demand has no longer been declining even though before that it seemed like cash was increasingly being replaced by mobile payments on Alipay and WeChat, said the above-mentioned source. "Thus, we pay more attention to cash business with more investment and enhanced management."
In January, NewUp Bank of Liaoning and Beijing Zhongguancun Bank said they are planning to stop offering cash services, involving their brick-and-mortar branches and automatic teller machines, this spring to focus on improving their online services.
Editor: Emmi Laine, Xiao Yi