The world's biggest banks -- Citigroup Inc, HSBC Plc and Bank of America among them -- have spent billions of dollars and devoted huge resources to positioning themselves for this moment.

The change, agreed to under conditions set when China joined the World Trade Organization in 2001, is the closest China, whose financial markets remain tightly regulated in many areas, has come so far to a "Big Bang" along the lines of the unprecedented 1986 overhaul of London's financial world.

But as avid as global banks may be to tap China's $4 trillion pool of household and commercial wealth and its fast-growing market for financial services, they are unlikely to win a major share of the industry anytime soon, analysts say.

"It is really difficult for foreign banks organically to grow, particularly in as large and idiosyncratic a market as China," says Michael Pettis, a professor of finance at Peking University's Guanghua School of Management.

The rules that take effect Monday will give foreign banks access to the local currency retail banking business, in theory lifting all geographic and client restrictions on operations. Previously foreign banks were allowed to offer such services, on a limited scale, only in 20 major cities.

Preparing for those changes, foreign lenders have sought multibillion-dollar stakes in local banks, expanded their branch networks and aggressively targeted wealthy clients with private, foreign currency banking services.

By the end of June, there were 71 foreign banks in mainland China with 183 branches.

Much of the foreign banking business is centered in Shanghai, site of 55 percent of total foreign banking business volume and 30 percent of all outlets, according to government figures.

Less than 2 percent of national market share

In Shanghai, the Chinese mainland's main international commercial center, foreign banks held 13 percent of all banking assets by the end of 2005. But nationwide, they account for an aggregate market share of less than 2 percent.

History suggests they are unlikely to grab a significantly bigger share of the market anytime soon, despite their overall stronger asset bases and better services, Pettis says.

In countries as varied as Russia, Brazil and the United States, market opening has not resulted in an exodus of customers from local banks to foreign ones.

"It's just never happened," he says.

Nonetheless, to meet what is viewed locally as an onslaught of foreign competition, local banks have revamped their operations, with the biggest getting multibillion-dollar government bailouts to recapitalize after writing off huge amounts of bad debt.

They've also sought out international lenders as strategic investors to draw in both money and management skills, maneuvering to control risks and improve their services.

"Local banks have done a lot," says May Yan, banking analyst at Moody's Investors Service in Hong Kong. "They were under the pressure of opening up the market. Now they are better financed and run on a more commercial basis."

Foreign banks are likely to speed up their expansion following the latest reforms, she says.

But plenty of hurdles remain.

Foreign banks dwarfed

The biggest may just be size. Although huge on a global scale, international banks are dwarfed by their Chinese rivals.

The biggest state-run commercial bank, Industrial and Commercial Bank of China has 18,000 branches and deposits totaling some $700 billion. The other big Chinese banks, although smaller, operate on a similarly grand scale.

Although service is slow -- waits of up to an hour for just a simple transaction are not uncommon, as clerks shuffle through piles of paperwork -- most customers are likely to stick to what they know rather than take the trouble to shift money to an unfamiliar foreign bank, says Pettis.

And while foreign banks theoretically have open access to the local market, WTO-sanctioned policies call for China to give them so-called "national treatment" similar to that given domestic banks, which are closely regulated in the first place.

Beijing recently issued rules requiring foreign banks to locally incorporate, establishing stand-alone China operations, in order to handle retail banking in local currency.

"A number of licensing regulatory restrictions and practices remain," noted the Moody's report.

Chinese regulators still limit foreign investments in local banks to below an aggregate of 25 percent of total equity in any one bank, with a cap of 20 percent of equity for any single foreign investor.

The only exception to that rule was won by a consortium led by Citigroup, America's largest banking institution, which last month got a green light allowed to acquire an 85.6 percent stake in Guangdong Development Bank, one of China's biggest regional financial institutions.

The $3 billion deal gives New York-based Citigroup a 20 percent stake in Guangdong Development Bank -- a move that will help the U.S. bank expand its operations in China.

"I think the foreign banks have a chance to grab some of the higher end retail and corporate business in the larger cities," says Yan of Moody's.

But she adds, "I think things are going to unfold more gradually. You won't see any major changes immediately."