Chinese home appliance retailer to launch private bank

Wants to enter the financial business.

Home appliance retailer Suning Commerce Group Co Ltd plans to apply for permission to launch a private bank to be called Suning Bank.

The group operates franchised retail stores in China that offer colored TVs, audio and video players, refrigerators, washing machines and other small household electrical appliances.

No further details have been released by Suning about the application for Suning Bank since the company is still preparing more detailed proposals.

Analysts believe the emergence of privately owned banks wouldn't have a huge effect on the current financial system. They would, however, create more challenges regarding the monitoring and inspection of the fund-raising activities of these institutions.

The State Council, China's cabinet, in 2010 issued an advisory document to encourage and guide the healthy development of private investments by introducing private capital into Chinese finance.

The same year, the China Banking Regulatory Commission also released a document to support private capital entering the banking industry on equal terms with other capital to create an improved environment.