CBRC approves launch of private banks

The China Banking Regulatory Commission approved on Friday the launch of three private banks in a trial aimed at allowing private capital a bigger role in China's financial system.

The three banks located in the cities of Shenzhen, Wenzhou and Tianjin are subject to the same regulatory rules as their State-owned counterparts.

Another two private lenders are in the pipeline, according to the commission, and more will be approved if the trial goes smoothly.

Chinese Internet giant Tencent is the biggest investor of the lender in Shenzhen. Huafeng Group and Chint Group are the leading investors in the Wenzhou bank. Maigou (Tianjin) Group has a partial investment in the lender in Tianjian.

The advent of private lenders is expected to raise the efficiency of the allocation of financial resources in China, where the State-dominated banking sector usually favors large and State-owned companies.

"The three private lenders are differentiated in marketing positioning and development strategy, aiming at providing the real economy with efficient and differentiated financial services," said CBRC Chairman Shang Fulin.

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