Agricultural Bank of China Ltd formed an asset management department on March 19 to develop wealth management products and manage the investment in such products, National Business Daily reported on Tuesday.

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At least 10 listed banks have established or will soon establish their own asset management departments since the Industrial and Commercial Bank of China first set up a department to provide customer asset management in China in 2009.

Zhang Xuyang, general manager of the asset management department of China Everbright Bank, said commercial banks have the advantage of investing in bonds and fixed-income products. He emphasized that the banks have rich experience in monitoring and controlling credit risk.

In January, Shang Fulin, chairman of the China Banking Regulatory Commission, pointed out at a meeting that the lack of standardization of wealth management services led to idle funds, raised financing costs and increased the risk of maturity mismatch and low liquidity.

He encouraged commercial banks to set up special departments to design wealth management products, calculate costs and control risks. The other departments and branches of the banks are only responsible for selling the products.

China's banking regulators have tightened rules on wealth management products. The CBRC issued a notice in March, mandating an individual account for each wealth product, which must be managed separately. It also required commercial banks to link wealth management products clearly with the assets that proceeds are invested in.

Previously, banks could pool assets in a non-transparent manner. Many critics argued that they were using proceeds from sales of new products to repay previous investors.