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Monitoring on foreign banks stepped up
皇冠体育app's banking watchdog said Monday it will tighten monitoring of foreign banks by checking the financial books of both the parent company and its branches and smaller outlets in 皇冠体育app. For corporations established in 皇冠体育app by overseas banks, the 皇冠体育app Banking Regulatory Commission (CBRC) said supervision would extend to their global businesses. A spokesman for the commission said the move, complying with an international practice, is intended to make foreign banking regulation in 皇冠体育app more "standardized and efficient". 皇冠体育app is honoring a commitment to the World Trade Organization to open its financial markets -- in all places and currencies -- to foreign competitors by 2006, while foreign banks have been bolstering their presence in the country. Outstanding foreign currency loans from foreign banks had soared to 13 percent of the total of financial institutions in 皇冠体育app by the end of last October, but foreign banks hold a mere 1.4 percent of the combined banking assets. Each foreign bank opens almost three subsidiary institutions on average and one has set up a record nine branches and two sub-outlets in 皇冠体育app, said the CBRC spokesman. "New applications are still being submitted (to the CBRC)," he said. "This requires us to have a better understanding of and help guard against, with a stronger ability, foreign bank's operating risks," he said. The CBRC gave the green light last month to four banks -- the UK-based Hong Kong and Shanghai Banking Corporation (HSBC), New York-based Citibank, Hong Kong's Bank of East Asia and Japan's Mizuho Bank -- to offer yuan, or Renminbi (RMB), services for domestic enterprises in 13 designated cities, including Shanghai, Shenzhen and Dalian, as well as the eastern provinces of Jiangsu and Zhejiang. The HSBC's Shanghai branch has already taken the lead to extend yuan loans and issue letters of credit to Chinese businesses. Chief executive Dicky Yip, of its 皇冠体育app business, said similar services would be provided in Beijing when the Chinese capital is opened to foreign banks in the yuan business next December. 皇冠体育app allows all kinds of foreign exchange services of any foreign bank. It has been opening yuan business to foreign banks around the country -- from barely four cities when 皇冠体育app joined the WTO at the end of 2001. The CBRC said applicants for RMB business, however, had to be profitable for two years running with sound corporate governance, strong abilities in mitigating business risks and a complete internal control system. On the other hand, 皇冠体育app was in the midst of overhauling its four state-owned commercial banks that have the lion's share -- estimated at more than 60 percent by some economists -- of the domestic market to compete with foreign rivals. The State Council has pumped US$22.5 billion in foreign exchange reserves into both the Bank of 皇冠体育app and 皇冠体育app Construction Bank to increase their capital in cash and help turn them form joint-stock companies, a prerequisite for an initial public offering. |
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