ANZ Banking Group Ltd, the fourth largest bank in Australia, will begin lending and banking operations in China on October 1 after its wholly owned ANZ Bank China Company Ltd received regulatory approval.

Final regulatory approval for the establishment of ANZ China was granted by the China Banking Regulatory Commission (CBRC) earlier this month, the Australia and New Zealand banking Group Ltd, commonly called ANZ said on Tuesday.

ANZ China will be a locally incorporated entity, allowing it to apply for a Renminbi (RMB) licence to support domestic retail and business clients in China, plus provide a range of foreign currency and RMB banking services for ANZ's institutional and network clients.

The bank has made an initial investment of RMB2.5 Billion (400 million AU dollars or 378 million U.S. dollars) in ANZ China, and its establishment will enable the acceleration of plans to establish up to 20 outlets in China in the next three years, it said.

"Local incorporation provides the foundation for ANZ to expand our presence, products and capabilities for customers in China," ANZ China Chairman Gilles Plante said in a statement.

"It significantly enhances our ability to grow organically and creates greater opportunities for co-operation with our strategic partners in Shanghai and Tianjin."

ANZ has three foreign bank branches in Shanghai, Beijing and Guangzhou, plus sub-branches in Shanghai and Beijing and a rural bank in Liangping county, Chongqing.