CHINA Merchants Bank will next week sharply tighten eligibility rules for mainlanders to open accounts at its Hong Kong branches, the latest move by domestic lenders to curb capital outflows as China steps up efforts to temper a slide in the yuan.

    Starting Feb. 1, applicants for account opening at China Merchants Bank’s Hong Kong branches, as well as at Wing Lung Bank, controlled by China Merchants Bank, must have assets at the bank averaging 5 million yuan (US$727,018.93) each day over the past three months, a 100-fold increase from the 50,000 yuan threshold previously, the bank said in a notice.

    The notice, distributed by China Merchants Bank’s headquarters to its nationwide outlets that handle applications from mainland clients, was confirmed by the bank’s client service department.

    Domestic banks have already taken a series of measures to restrict capital outflows, in a bid to ease depreciation pressure on the yuan.

    The yuan fell nearly 7 percent against the U.S. dollar last year, the biggest decline since 2009 as worries about China’s economy and expectations of a faster pace of U.S. interest rate increase triggered an outflow of funds.

    In November, China’s foreign exchange watchdog started vetting outbound payments worth US$5 million or more, and starting Jan. 1, individuals purchasing foreign exchange at banks were banned from using the money for investment purposes, such as buying overseas properties and certain types of insurance.

    Privately, wealth managers say once the money is in Hong Kong accounts, it would be difficult for regulators to track how the money is used afterwards.

    Merchants Bank, which already strengthened approval for mainlanders’ Hong Kong account openings in December, said that starting next month, the bar would be further raised. (SD-Agencies)