Banks are expected to be allowed to own majority stakes in online-only banking ventures, as the government pushes ahead with its strategy of easing access for foreigners to China’s vast financial markets.
Currently, foreigners struggle to make money in mainland retail banking, with many yet to break even despite years of onshore presence as they compete with the vast physical networks of domestic rivals. Thus, the guidelines could enable foreigners with existing China operations such as Citigroup, HSBC Holdings and Standard Chartered to set up separate digital banking platforms.
About a dozen groups including foreigners are in talks with Chinese regulators over the new rules and have shown interest in launching digital banking operations. The rules would allow them to partner tech companies for independent digital banking platforms.
The framework, which will cover the existing online banking units of Alibaba Group Holding and Tencent Holdings among others, will form China’s first comprehensive move to standardise oversight of the fast-growing digital banking sector, Reuters continues.
Other Asian economies including Hong Kong and Singapore are also ushering in digital-only banks.
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