A big step forward for private banks
In the latest reform of China’s banking system, the country has approved the establishment of three private banks, including Webank by Internet giant Tencent.
The move is intended to continue financial reforms and the opening of the banking sector.
Shang Fulin, chairman of the China Banking Regulatory Commission (CBRC), announced the move on Friday and said that the purpose of the reform is “to provide efficient and diversified financial services to the real economy.”
Webank, located in the southern city of Shenzhen, will have two other main co-founders, Shenzhen Baiyeyuan Investment Co. and Shenzhen Liye Group, according to the commission.
The bank will mainly serve individual customers and small and micro-businesses.
The other two banks are located in the eastern city of Wenzhou and the northern municipality of Tianjin. The trial of private banks will be one of the focuses of financial reform in the future.
However, experts warn that profit margins for banks have shrunk, and that risks remain.
CCTVNews has the story.