China’s banking regulator has approved three banks’ plans to launch the country’s first consumer-finance companies.
Bank of China plans to launch a consumer-finance company with registered capital of $73 million in Pudong.
Bank of China, one of the Big Four state lenders, will own 51% of the company, while Bailian Group, a state-run retail and logistics giant that owns several listed firms will hold a 30% stake. A Shanghai municipal government-owned company based in Lujiazui, the city’s financial center, will hold the remaining stake in the consumer-finance company.
The banking regulator also approved Bank of Beijing and Bank of Chengdu’s plans to set up consumer-finance companies in their home cities.
In May, the banking regulator announced a draft plan to allow local and foreign firms to launch consumer-finance companies in a bid to offer an additional channel for Chinese consumers to finance travel, education and purchases of durable goods.
Wall Street Journal Online reports such companies aren’t allowed to lend for property and car purchases. Nor can they take deposits.