China to allow private banks on trial basis

BEIJING - China will set up five private banks on a trial basis to ease restriction on the state-controlled banking industry, the head of the country’s banking regulator has said on Tuesday.

Speaking at a press conference, Shang Fulin, head of the regulator, said the first batch of the five banks will be in Tianjin, Shanghai, Zhejiang Province and Guangdong Province.

Ten private companies, including Internet firms Alibaba and Tencent, have been selected to take part in the preparation for setting up the banks.

“Each of the banks will be co-sponsored by at least two private capital providers” he said. “Their eligibility as shareholders will be subject to further examination.”

The commission did not provide a timetable for the launch of the banks but the private banks would be subject to the same regulation and supervision of the existing banks.

China is allowing private banks in the country to make China`s economy more productive.

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