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Rules eased to lure bankers westward China will allow foreign banks to set up commercial branches in the west of the country without having to open representative offices first, said the China Banking Regulatory Commission (CBRC). The new policy, aimed at luring more investment to China’s relatively underdeveloped western region, would overrule current regulations requiring foreign banks to run representative offices in cities for two years, before upgrading them to branches. “Foreign banks may directly apply for the establishment of operational branches in western China, without the need of opening representative offices there first,” Xinhua quoted Xu Feng, a director within the CBRC, as telling foreign bankers visiting Sichuan Province on Tuesday. Dutch lender ABN AMRO, which has applied to open a branch in Sichuan’s provincial capital of Chengdu, hoped to be the first to do so directly, Xinhua cited an ABN spokesman as saying. Foreign banks, which can lend in local currency to domestic firms, but cannot conduct retail business until the market is liberalized from late 2006, have been positioning themselves in what many see as a huge potential growth market. Citigroup Inc. upgraded a representative office in Chengdu to a branch earlier this month. HSBC Holdings Plc., the world’s third-largest bank by market value, has also
won approval to upgrade two representative offices in the west of China into
fully-fledged branches. |
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