SEOUL, March 19 South Korea's central bank and
financial regulator are inspecting the units of four foreign
banks following a spike in yuan deposits, three sources with
direct knowledge of the matter told Reuters on Wednesday.
One of the sources, who declined to be identified, said the
Bank of Korea and the Financial Supervisory Service are
inspecting branches of Bank of China Ltd.,
Industrial and Commercial Bank of China Ltd., China
Construction Bank Corp. and Barclays PLC.
The inspection is due to run until March 28.
Another source told Reuters that regulators were looking
into a spike in yuan-denominated deposits as Chinese banks ramp
up fundraising overseas in response to tighter credit conditions
Regulators have been concerned about the rapid build-up,
albeit from a low base, of yuan deposits in South Korea because
of potential risks out foreign currency outflows. Foreign banks
are allowed to raise yuan deposits in South Korea.
(Reporting by Joyce Lee and Lee Shin-hyung; Writing by Se Young
Lee; Editing by Choonsik Yoo and John Mair)