CHINA Merchants Bank Co., the country's largest domestically-listed lender, said Tuesday that it obtained central bank's approval to issue foreign currency-based credit cards to local residents.

　　The People's Bank of China gave go-ahead to the Shenzhen-based bank to settle payments for foreign-currency credit cards issued by other banks and to issue international credit cards which are settled in foreign currency, usually U.S. dollars, the bank said in a statement.

　　The central bank's approval means that China Merchants, the sixth-largest commercial bank on the mainland, has entered the country's sizable foreign-currency credit-card market to compete with other domestic rivals to tap Chinese citizens traveling abroad, an estimated 1.2 million last year.

　　So far, only three domestic banks, the Bank of China, the Industrial & Commercial Bank of China and the Guangdong Development Bank, have obtained permissions from the central bank to issue international cards for local residents to use overseas.

　　Domestic banks have to turn to other revenue sources after the central bank has slashed interest rates eight times since 1996. Interest margins provide three-quarters of domestic banks' operating income.

　　Domestic banks also have to face increased competition from foreign rivals, which have long intended to tap the domestic retail banking market directly.

　　China is opening its sheltered banking sector, still dominated by state banks, to foreign players gradually as it promised on joining the World Trade Organization last December.

　　Citibank , Standard Chartered , HSBC were among foreign banks given licences to conduct foreign currency business with Chinese citizens this year.