Foreign banks told local lending rules

The banking regulator informed foreign banks of the legal structure they must adopt in order to offer the full range of local-currency services to customers across China, the Wall Street Journal reported. Under the new rules, which have yet to be finalized, overseas banks' local operations will have to be incorporated in China as domestically-registered companies and have registered capital of US$125 million. At present, the banks – which own their China branches from overseas headquarters – can only offer yuan-denominated services to enterprises, not retail customers, although they have free rein when it comes to foreign currency services. Under China's WTO accession commitments, local-currency business must be opened up to international competition in December. HSBC announced plans on Monday to set up six more branches in China by the end of the year, bringing its total in the mainland to 30.