BEIJING | China on Tuesday approved four foreign banks to begin local currency services to individual Chinese customers, opening up access to the country's $4 trillion in household savings and surging demand for credit cards and other financial services.

The four banks approved are the locally incorporated entities of Citigroup Inc., HSBC Holdings PLC's Hongkong & Shanghai Banking Corp., Standard Chartered PLC, and Bank of East Asia Ltd., the China Banking Regulatory Commission said in a statement posted on its Web site.

Branches of the four will be able to offer a full range of yuan services to Chinese clients once they register their licenses, a technical step that usually takes just a few days.

Eight other banks were in the process of incorporating local entities ahead of offering unrestricted yuan services, the notice said. Those were identified as JPMorgan Chase & Co., ABN Amro Holding N.V., Hang Seng Bank Ltd., Mizuho Financial Group Inc.'s Mizuho Corporate Bank, DBS Group Holdings unit DBS Bank, Bank of Tokyo-Mitsubishi UFJ, Wing Hang Bank Ltd., and Oversea-Chinese Banking Corp.

Of the total of 12 foreign banks, 10 have or are planning to establish their China headquarters in Shanghai, the country's financial services center which already handles 55 percent of foreign banking volume. JPMorgan picked Beijing and Wing Hang chose the southern manufacturing hub of Shenzhen.

Chinese banks have been rushing to upgrade their services in advance of the new competition, but are expected to retain the lion's share of the retail banking market. Domestic banks and also protected by regulations blocking foreign banks from taking over a Chinese bank under most circumstances: Total foreign ownership of a Chinese bank limited to 25 percent, with no more than 20 percent held by a single entity.

"Today's approval marks the beginning of an unprecedented new chapter in Citi's long history in China," Citigroup's China Chief Executive Richard Stanley said.

Foreign banks were previously restricted to offering foreign-currency services to individuals, although they could provide both local and foreign-currency services to enterprises.

China pledged in its 2001 World Trade Organization accession agreement to fully open its banking sector to foreign banks by Dec. 11, 2006.

Less than a month before that pledge came due, China issued rules requiring foreign banks to locally incorporate before being granted full access to Chinese customers, a move Chinese officials said was aimed at protecting Chinese depositors and improving supervision over foreign banks as they ramp up expansion in China.

Foreign bankers say despite some initial concerns about the new rules, the regulatory commission has tried to smooth the process for the banks to transfer their operations.

Three more foreign banks have applied to locally incorporate and their applications are under consideration. Those are United Overseas Bank Ltd., Citic Ka Wah Bank Ltd., and Bank of China (Hong Kong) Ltd.'s wholly owned unit Nanyang Commercial Bank Ltd.