Money milestone: Chief Executive Tung Chee Hwa says Hong Kong banks can operate renminbi services from January.

The Central Government has given the green light for Hong Kong banks to operate personal renminbi banking services. Chief Executive Tung Chee Hwa says a memorandum will be signed in Beijing tomorrow.

Announcing the decision today, Mr Tung said this is an important step allowing all banks to operate renminbi services from January.

Mr Tung said the move is significant and will help maintain Hong Kong's status as a leading financial centre.

The banks are allowed to run four aspects of renminbi services, namely deposit-taking, currency exchange, remittances and credit-card services.

Deposit taking: Hong Kong-licensed banks participating in RMB business can offer RMB deposit-taking services to Hong Kong residents.

Exchange: Participating banks can offer to holders of RMB deposit accounts a service for converting RMB into HK dollars and vice versa. The maximum amount that can be exchanged per person per day is the equivalent of RMB20,000. For people who are not holders of RMB deposit accounts, the maximum is RMB6,000 per transaction.

Remittances: Participating banks can offer RMB deposit account holders a service for remitting from their Hong Kong accounts RMB funds to accounts under the same name on the Mainland. The maximum is RMB50,000 per person per day.

Renminbi Cards: Mainland residents can use RMB debit cards and credit cards issued by Mainland banks for spending in Hong Kong. Participating banks or their subsidiaries can also issue RMB debit cards and credit cards to residents of Hong Kong for use on the Mainland.

Financial Secretary Henry Tang said the arrangements for banks to conduct renminbi business on a trial basis are an important step forward for the development of our banking sector.

He said it will help promote economic integration between Hong Kong and the Mainland, and facilitate cross-border tourist spending.

Monetary Authority Chief Executive Joseph Yam said the move will open a new channel for the flow of renminbi funds between Hong Kong and the Mainland through the banking system.

In the long term, this development will have great significance for developing Hong Kong as an international financial centre, he said.