China greenlights establishment of overseas banks

Arab Bank has received the green light to set up a Shanghai unit.

The China Banking and Insurance Regulatory Commission (CBIRC) has approved the application of several overseas banks seeking a foothold in the Mainland as a testament to Beijing’s efforts to liberalise its financial sector.

Also read: China had over 7 billion cards in circulation in 2017

The banking regulator greenlit the application of Arab Bank who’s been seeking to set up a branch in Shanghai as well as Taiwan-based CTBC Bank who’s establishing a Shenzen unit.

A sub-branch of the Bank of East Asia is also set to be upgraded into a branch in Shenzen, whilst subsidiaries of Chang Hwa Bank and Cathay United Bank received clearance to open for business.

Also read: China dominates world's largest banks even as Europe flexes financial muscle

The move comes after CBRC outlined implementation measures following an announcement from China‘s Vice Finance Minister Zhu Guangyao in November 2017 removing caps on foreign ownership in Chinese financial institutions.

“Our expectation is that foreign banks can look forward to a smoother road to investing into China’s financial sector following the promulgation of this Decision and further implementation rules,” accounting firm EY said in an earlier report.

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