China’s banking regulator will ease caps on foreign ownership in financial asset management companies and Chinese banks (excluding private banks) and apply non-discriminatory ownership limit rules.
China Banking Regulatory Commission announced 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.