Let Private Capital Set Up Banks, Zhou Xiaochuan Argues
(Beijing) – Central bank governor Zhou Xiaochuan published an article in a Communist Party magazine on September 16 that calls for inclusive financial development that includes allowing private capital to set up banks.
The article appeared in Qiushi, a semi-monthly publication of the Central Party School, the party’s think tank and ideological training school. It said the central bank will follow the "mass line" set by the party’s Central Committee.
This involved measures including increasing lending to small and medium-sized enterprises, expanding financial services in rural areas, and beefing up consumer protection and education regarding financial products. In addition, he said the central bank will encourage financial innovation and guide the development of Internet finance.
Zhou emphasized the need to "support private capital to set up private banks and guide them to position themselves in serving the small and micro companies."
Since June, several private companies’ applications to set up banks have received "preliminary approval" from the State Administration for Industry & Commerce.
Next, they had to wait for the green light from the China Banking Regulatory Commission (CBRC). Applicants included retail giant Suning Commerce Group Co. Ltd. and Hubei Kaile Science and Technology Co. Ltd., a high-tech new materials manufacturer.
Suning’s documents are with the CBRC’s branch in the eastern province of Jiangsu, Caixin learned. A CBRC official said in late August that none of these private bank applications have reached the commission’s headquarters.
However, a CBRC document obtained by Caixin showed that one of the agency’s priorities in the second half of this year is to push for "more pilot programs of private financial institutions that bear their own risks."
In the article, Zhou cited the success of financial development programs in Brazil and Mexico and applauded their innovation and effectiveness.
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