China's central bank relaxed credit card ending rates and increased the cash withdrawal limit.

Starting next year, the People's Bank of China (PBOC) will permit commercial banks to offer discounts as much as 30 percent on credit card lending rates which currently stand at 0.05 percent per day, the PBOC posted in a statement on its website. 

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It will also increase ATM's daily cash withdrawal limit allowed from 2,000 yuan to 10,000 yuan. 

PBOC also chopped off unified rules on banks' interest-free period, which currently run as long as 60 days, and minimum monthly payment, which is at least 10 percent of their monthly bills, giving banks more freedom to set their own terms.

Furthermore, banks will extend its leeway on fees they charge for late or delayed monthly payments.

According to the PBOC, the softer rules aim to improve the credit card issuers' services, boost healthy competition, and develop a sustainable credit card industry.

Meanwhile, banks are tasked to inform their clients of the latest term at least 45 days before the new policies take effect. They are also required to register their respective lending rates, interest-free period, and minimum monthly payments to the central bank at least 60 days before the actual adjustments commence.

Credit card loans account for three-fourth of China's short-term consumption credit. Last year, there were around 390 million credit cards issued across China, and holders owed more than 3 trillion yuan.

TagsCredit Card, finance, china, People's Bank of China (PBOC), commercial banks, yuan