BEIJING, July 25 (Xinhua) -- China has approved the establishment of three private banks, including Webank by Internet giant Tencent, as it steps up financial reforms and opens up 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, said the commission.
Chint Group and Huafon Group are co-founders of the bank in Wenzhou, which targets local small and micro companies, individual businesses and residents, as well as clients in rural areas.
The bank in Tianjin, with Huabei Group and Maigou (Tianjin) Group as co-founders, will mainly engage in corporate banking services, the chairman said.
Experts said the authorization will increase competition in the banking sector and improve financial services to the country's weak links such as the agriculture sector and small businesses.
Although China's overall money and credit supply is not low, companies still have difficulties accessing funds and face high financing costs.
Chinese Premier Li Keqiang said at an executive meeting of the State Council on Wednesday that China will take various steps to give more financing support to the real economy, with a focus on optimizing credit structure.
CBRC said in March that China will set up five private banks on a trial basis. Each of the banks will be co-sponsored by at least two private capital providers.
Shang said the commission is working with related capital providers to make plans for the launch of another two private banks.