CBRC Sets to Further Open up the Banking Sector

The opening up of China’s banking sector since 1980s has played a positive role in driving the reform and development of the national economy. Especially following China’s accession to the WTO in 2001, Chinese banking sector has witnessed higher level of foreign participation in a wide range of areas, evidenced by increased number of foreign financial institutions, enhanced performing results driven by foreign capital, and more diverse offerings of financial products and services.

In the context of banking industry’s strategic transformation and the need to better serve the real economy, the CBRC will continue to help improve market access and business environment to facilitate greater foreign participation in China’s financial markets, with a view to enhancing the industry’s diversity and competitiveness.

With the approval of the State Council, the CBRC will ease caps on foreign ownership in Chinese banks (private banks excluded) and financial asset management companies and apply non-discriminatory ownership limit rules. Going forward, the CBRC is set to further open up the banking sector towards the following policy directions:

-Allow for wider commercial presence choices of foreign banks to encourage a more diversified financial system.

-Broaden the business scope of foreign banks, including removing the waiting period for conducting renminbi business, supporting foreign bank branches to engage in government bond-related businesses, loosening the renminbi retail deposit-taking requirement for foreign bank branches, supporting foreign banks to conduct financial market businesses, so as to boost the vitality of the financial system.

-Refine regulatory rules, including adjusting supervisory requirements on working capital of foreign bank branches and supervisory evaluation approaches, to further unleash foreign banks’ potential. 

To implement the above-mentioned policy measures, revisions of existing laws and regulations, along with improvements of prudential regulatory mechanisms and supportive measures, are needed beforehand. The CBRC is committed to pushing forward the  opening up of the banking sector in an active and step-by-step manner. In the meantime, the CBRC will continue to improve regulation in order to maintain the safety and soundness of the financial system and defend the bottom-line of preventing systemic risk.

 

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Copyright: China Banking Regulatory Commission
ADDR:Jia N0.15 Financial Street, Xicheng District, Beijing, 100033