China to cut red tape for foreign lenders

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China’s banking regulator has issued draft measures for amending its licensing and oversight of some foreign-funded bank activities, a move it says is aimed at promoting investment in the country’s fast-growing financial sector.

In a statement on Thursday, the China Banking Regulatory Commission (CBRC) said it is preparing to implement amended administrative measures to “standardize market access” for foreign lenders, and cut red tape to create a level playing field for such activities as branch openings, debt fundraising and examination of senior executives.

Guo Shuqing, chief of China's banking regulator speaking at the World Economic Forum. / Reuters Photo.‍

The CBRC will clarify procedures and application materials for foreign and joint-venture banks to invest in domestic banking institutions after a notice issued in March approved such behavior.

A notification system also will be installed for four types of activities, including securities fund custody business and the provision of wealth management services for foreign customers, the regulator said.

In the notice, the CBRC also eased license requirements for foreign and joint-venture banks in services including treasury bond underwriting and financial advising.

Foreign banks will only need to report to authorities after they launch certain services, rather than obtaining approval in advance, according to the revised rules.

The public has until January 27 next year to give suggestions on the revised rules, the CBRC said.

In November, Vice Finance Minister Zhu Guangyao said China will raise foreign ownership limits in some joint-venture firms in the futures, securities and fund markets to 51 percent from the current 49 percent.

A month earlier, CBRC chairman Guo Shuqing said the country was preparing to further open up its banking system to foreign investors.

The market share of foreign banks in China has decreased to 1.2 percent from 2.4 percent 10 years ago, Guo said, which “is not beneficial for promoting competition."

Source(s): Reuters ,Xinhua News Agency