Draft rules published by China’s banking regulator lay out new opportunities for foreign banks to do business on the mainland, including how to operate parallel incorporated subsidiaries and branches, Caixin reports.
The announcement substantiates promises made a year ago by Beijing and reiterated in April that China would step up market access for international lenders.
The aim of the rules is to “further open up the banking industry, encourage competition, increase the risk-prevention capabilities of foreign banks and beef up the protection of consumers’ rights and interests,” the China Banking and Insurance Regulatory Commission said in an accompanying statement.
Foreign firms will be allowed to establish wholly-owned subsidiaries and operate them alongside branches tied to their overseas entities. They will also be able to simultaneously run joint ventures with Chinese banks and branches wholly owned by their overseas entities.
The rules also introduce new restrictive measures, however, such as limits on foreign banks’ ability to carry out retail banking services such as mortgages, loans, and credit cards.