Up to five private banks will be created in China this year as it looks to open up the financial sector and raise competition in the industry.
The banks will be allowed to operate on a trial basis under the supervision of Chinese banking authorities.
Private finance will be used to either restructure existing banks or set up new ones “bearing their own risks”.
China has been looking to open up its tightly-controlled financial sector to spur a fresh wave of economic growth.
“Strict procedures and standards will be set for the pilots, with demanding set-up criteria, limited licenses, enhanced supervision and a risk handling system,” China Banking Regulatory Commission (CBRC) was quoted as saying by the state-owned Xinhua news agency.
The CBRC also said that it would explore lowering the threshold for foreign banks to enter the industry.
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