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The Industrial and Commercial Bank of China (ICBC), the country's largest lender, yesterday launched its first fund to invest clients' money overseas.

The bank started selling the fund, part of its US$2 billion investment quota under the qualified domestic institutional investor (QDII) scheme, in its Beijing, Shanghai, Shenzhen, Zhejiang, Jiangsu and Guangdong branches.

Each domestic client would have to subscribe a minimum 50,000 yuan (US$6,250) to the half-year fund. The bank would convert renminbi into foreign currency and invest in overseas bills and money-market instruments with high investment grade ratings, the bank said.

Investment returns for overseas bills could be between 3 per cent and 7 per cent.

"We will continue to launch different QDII products," the bank said, warning clients to carefully read the product's investment plans and be aware of possible risks.

The ICBC was among the first batch of commercial banks that obtained a total US$4.8 billion QDII quota from the State Administration of Foreign Exchange on July 21.

The other two banks, Bank of China and Bank of East Asia, obtained QDII quotas of US$2.5 billion and US$300 million respectively.

Bank of China, the country's top foreign exchange bank, launched its first fund last Friday.

According to the bank, corporate investors can book their purchases from July 28 until August 9, after which any investor would be able to put money into the fund up until September 8.

The mainland branch of Bank of East Asia is yet to launch its product.

The central bank said in April that it would allow approved banks, fund management companies and insurers to invest in overseas capital markets on behalf of their clients.

The move is widely believed to represent a big step forward for the Chinese Government in reforming the nation's capital account and further integrating the capital market into the global financial platform.