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Hong Kong property agents won't accept China UnionPay cards

Friday, March 24, 2017 - 14:30

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Banks are asking Hong Kong property agents to stop accepting China-issued UnionPay cards, as mainland authorities escalate their crackdown on capital flows out of the country.

[HONG KONG] Banks are asking Hong Kong property agents to stop accepting China-issued UnionPay cards, as mainland authorities escalate their crackdown on capital flows out of the country.

Ricacorp Properties Ltd won't accept China-issued UnionPay cards for home purchases starting Friday after it received a verbal notice from banks, said a spokesman.

Centaline Property Agency also implemented the new rule, according to people familiar with the matter, who asked not to be named because they aren't authorized to speak to media.

China has clamped down on capital flight out of the mainland as it seeks to stabilise its currency, tightening rules on everything from overseas insurance purchases to corporate dealmaking. In Hong Kong, a rush of demand from Chinese buyers has driven home prices to record highs.

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An index of Hong Kong's property stocks fell 0.7 per cent as of 1:54pm local time on Friday, making it the biggest drag on the Hang Seng Index. Sun Hung Kai Properties Ltd declined as much as 2.3 per cent, the biggest intraday slide in three months, as New World Development Co dropped 1.6 per cent.

Some Chinese buyers transfer money using UnionPay cards to Hong Kong property agents, who help them get cashier's orders from banks to subscribe for new units, people familiar with the matter said. Cashier's orders are also used for putting down a portion of the home deposit, the people said.

A Centaline spokesman declined to comment, while UnionPay didn't immediately comment on the curbs. A statement on UnionPay's website states it strictly bans using domestically issued UnionPay cards for overseas property purchases.

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