China to establish fully-private banks

The Chinese government has announced plans to establish 3-to-5 fully-private banks which will be responsible for their own risk management.

The China Banking Regulatory Commission, or CBRC, announced yesterday that private capital will be introduced to restructure the sector.

Currently, Minsheng Bank is the sole private-owned entity in the country's list of top 10 commercial lenders.

While the move signals an opening of the sector, the authorities have promised to maintain "prudential regulatory standards"

Banking assets in China have more than doubled over the past five years, now amounting to some 147 trillion yuan, or 24 trillion US dollars.

As part of the pilot scheme, the CBRC also promises to relax controls on foreign capital entering the banking sector.