China approves pilot plan to set up 3-5 private banks

China's regulator has approved a pilot plan to set up three-to-five private banks in the country's pilot plan to channel private capitals into the banking sector which has long been dominated by state-owned players.

Licenses for the country's first batch of private banks are expected to be issued before March, said Cai E'sheng, deputy chairman with the China Banking Regulatory Commission (CBRC) at a meeting on Monday.

E-commerce group Alibaba, electronics retailer Suning and leading Chinese electric appliance makers Midea and Gree are among the most anticipated candidates to win the first licenses, according to analysts.

The pilot plan to allow private companies to build their own financial institutions is a part of the regulator's efforts to deepen reform and opening up of the country's banking sector.

CBRC is also planning to broaden private capital's access to the state-assets-dominated banking sector, according to its plan for 2014.

Those banks should comply with prudent regulatory rules and set up proper risk management scheme, said the banking regulator which also said it would take steps to rein in banking risks in 2014.