China's banking regulator has revised a rule introduced early
last year requiring any newly established joint stock commercial
bank to have "an overseas strategic investor".
The revised rule, effective immediately, requires only "a
qualified strategic investor" for any new commercial bank,
according to a statement from the China Banking Regulatory
Commission (CBRC) published on its website yesterday.
Officials from the CBRC said that the commission had encouraged
Chinese banks to seek foreign investors so that they could use
their expertise and experience to help improve corporate governance
and internal control.
But the continuing opening up of the banking sector has seen the
number of qualified domestic investors increase, prompting the
regulator to revise the rule, the CBRC said.
Earlier media reports said the rule change was intended to pave
the way for the creation of a new postal savings bank and the
reform of the Agricultural Bank of China.
The CBRC approved the establishment of the China Postal Savings
Bank, which is wholly owned by the China Post Group, in late
December. And the bank, to open soon, has no intention of
introducing foreign investors.
"The policy change is definitely favorable for the launch of the
postal savings bank and the reform of the Agricultural Bank of
China," said Li Yongsen, a professor of finance at the Renmin
University of China.
"But it is not only for the two banks," he said. "With the
further opening up of China's financial market, it is unnecessary
to distinguish between overseas and domestic investors."
Market insiders also said that the rule change is intended for
the future reform of a group of city commercial banks.
A large group of city commercial banks will launch a restructure
this year, but not all of them will be able to lure foreign
investors. Meanwhile, the quality of domestic investors is
improving.
The CBRC has also revised an administrative rule on the
financial companies of enterprise groups. The previous rule said
that financial companies could introduce qualified foreign
institutional investors who must then hold their shares for at
least five years.
The requirement was changed to "qualified institutional
investors" with a reduced lock-up period of three years.
(China Daily January 18, 2007)