HK Bankers will be scrambling all over smaller towns in China now that they are approved to open an unlimited number of sub-branches in China from October 1.Branches of Hong Kong banks in Guangdong province can now establish "cross-location" sub-branches within the province. This is the new measure provided under the Sixth Supplement to the Closer Economic Partnership Agreement or CEPA.Under the present rule, if a bank wishes to maintain presence in multiple municipalities, it will have to set up a branch in each location. Sub-branches can only be established in the same municipality as the branch that it belongs to. Under the new measure which takes effect on 1 October 2009, branches of Hong Kong banks in any municipality in Guangdong may apply with the authorities to set up sub-branches in the other municipalities in the province.It is envisaged that the new measure will not only allow Hong Kong banks to extend their distribution networks through setting up more sub-branches but also accelerate the integration of Hong Kong's financial sector with that of Guangdong province, further advancing the economic power of the region.The new banking measure forms part of the CEPA Supplement VI which was announced by the Government of the Hong Kong Special Administrative Region and the Central People's Government.Peter Wong, Chairman of the Hong Kong Association of Banks, said, "The new measure will facilitate Hong Kong banks in Guangdong province to provide services in more cities, which also bring benefits and convenience to local mainland residents as well as business operating in the area. This will also be another strategic step in the long-term development of Hong Kong as the international financial centre for mainland China."
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