Credit card debt: China's apex bank warns of risks

China's central bank on Thursday warned commercial banks to be wary of risks posed by growing bad debts in the credit card sector which has mounted to $1.19 billion.

Credit cards debt 180 days past the due repayment date stood at 7.92 billion yuan ($1.19 billion) by the end of the third quarter, up 8.5 per cent from the second quarter, the People's Bank of China said.

Taking this into account, the PBC warned commercial banks to pay close attention to risks associated with credit card related bad debt, Xinhua news agency reported.

Money owed 180 days past the due repayment date accounted for 2.1 per cent of the total amount of debt by the end of the third quarter, down 0.4 percentage point from the second quarter, according to the statement.

Meanwhile, Chinese police have also been making greater efforts to fight crimes concerning bank cards to safeguard the country's financial order, Xinhua said.

Between January and October this year, police handled 19,000 cases of bank card-related crimes, and retrieved funds totaling 600 million yuan (about $90 million), the Ministry of Public Security said.

The ministry, along with PBC launched a nationwide campaign against bank card-related crimes this January.

Since then, over 1,000 dens involved in illegal credit cards have been smashed, the report said.

According to statistics issued by China UnionPay, an association for the country's banking card industry, the total number of bank cards issued in China reached over 2.1 billion as of the first half of 2010.

With bank cards being widely used, China saw rampant cases of fraudulent use of bank cards, including illegal cash advances at vendor terminals and unauthorised overdrafts, the report said.