Alibaba may be first to set up Internet bank

Alibaba Group may become the first Internet company to tap China's banking industry as three to five private firms, including Alibaba, may obtain private bank licenses soon, according to media reports.

Hangzhou-based Alibaba may receive the green light to establish an Internet-based bank, one of the two private banks to be set up in Zhejiang Province. The other private bank will be controlled by more than 10 private companies from Wenzhou, Great Wisdom AAStocks news agency reported yesterday, citing unnamed sources.

Private banks will supplement the banking system as it promotes differentiated competition, said Liao Min, head of the Shanghai Bureau of the China Banking Regulatory Commission.

Private banks will have restricted licenses which limit their business scope. They will also target different customer and territorial markets.

Market watchers expect the licenses to be issued after the annual session of the National People's Congress being held in Beijing.

The CBRC said two months ago that it will approve up to five private banks this year under a trial.

Zhou Xiaochuan, governor of the People's Bank of China, has emphasized that regulations on Internet finance will be strengthened.