China to Open Up Banking Sector, Private Banks Planned

China has indicated that it is ready to further open up its state-run financial sector and create between three and five new private banks this year.

The China Banking Regulatory Commission (CRBC) announced that private capital would be used to either restructure existing banks or set up new ones bearing their own risks. The banks will operate on a trial basis under the supervision of regulators.

“Strict procedures and standards will be set for the pilots, with demanding set-up criteria, limited licenses, enhanced supervision and a risk handling system,” the CBRC said, according to the state-owned Xinhua news agency.

The CRBC added that it might even lower the threshold for foreign banks to enter the Chinese banking sector and ease renminbi (RMB) operation requirements.

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