"Going public optimizes banks' corporate governance structures, increases their transparency, standardizes management and improves competitiveness, especially at this time when they face restrictions in the capital market, rather than the local government interference they might have in the past," he said.

Wu Qing, deputy director of banking research at the Development Research Center of the State Council, said many regional city banks need to replenish capital levels to counter rising nonperforming loans.

According to the CBRC, outstanding NPLs of regional city lenders reached 121.5 billion yuan by Sept 30, up from 85.5 billion yuan at the end of 2014. Their NPL ratio increased 28 basis points to 1.44 percent during the same period.

Zeng said many of the banks actually started preparing for an IPO in the A-share market several years ago－but the door remained closed from 2008 until January 2014, and then was suspended again from early July to Nov 6 this year amid abnormal fluctuations in the stock market.

Zhong Wei, a finance professor at Beijing Normal University, also warns the stock performance of regional city banks may not be good, once they do list.

"The business capability and competitiveness of some have not improved, despite their rapid expansion.

"Most mid-sized regional lenders are worth less than 1 trillion yuan, so they are also likely to become takeover targets for larger banks," he said.

An added pressure, said Zhong, is that with the ongoing economic slowdown and interest rate liberalization likely to continue, and NPL ratios still rising, "investors cannot expect good returns from the new shares" for at least three years.