CHINA has levelled the field in the banking industry by allowing private investors to enter and participate in the sector under the same standards as other investors, according to a statement posted by the China Banking Regulatory Commission on its website.

"The banking regulatory authority shall promote equal competition among different types of investors, and shall not set up restrictions or additional conditions for private capital to enter the banking industry," the CBRC's statement said.

"The authorities shall smooth the approval channels, make the approval process public, and improve the transparency of the banking market accessibility constantly."

The statement, released on Saturday, said that private companies can buy into lenders through private stock placements, new share subscriptions, equity transfers, or mergers and acquisitions.

Some eligible private investors are allowed to own a stake of over 20 percent in city commercial banks.

The minimum shareholding of the main initiator for rural banks is cut to 15 percent from 20 percent.

Private investors are also allowed to invest in trust, financial leasing and auto-financing companies, the statement said.

The new rules aim to encourage and guide private capital into the banking sector, and to strengthen the necessary financing support for private investment, the CBRC said.

In March, Wenzhou in Zhejiang Province in eastern China was chosen as a pilot financial reform zone, which allows private lending targeted at cash-strapped small businesses to save them from bankruptcies.

The CBRC is the sixth authority that has issued guidelines recently to encourage private capital to enter state-controlled industries as the government tries to sustain growth in the slowing economy.

April 13: The Ministry of Transport said it will encourage private funds in the sector.

May 18: The Ministry of Railways said it will promote private investment in railway construction.

May 21: The Ministry of Health said that social capital can set up non-profit medical institutions.

May 25: The China Securities Regulatory Commission announced that private capital can invest in brokerages and futures firms.

May 25: The State-owned Assets Supervision and Administration Commission said it will encourage private capital to help restructure state-owned enterprises.

May 26: The China Banking Regulatory Commission issued rules help private funds enter the banking sector under the same conditions as other investors.

Source:shanghaidaily