The CBRC has approved three banks to set up consumer finance companies.

Recently, the China Banking Regulatory Committee (CBRC) has approved Bank of Beijing, Bank of China and Bank of Chengdu to establish consumer finance companies as main investors in Beijing, Shanghai and Chengdu respectively.

To achieve the state council’s aims of ensuring economic growth, expanding domestic demand, adjusting industrial structure and enhancing people’s welfare, and to strengthen our support in the effort of promoting the domestic demand, the CBRC launched the Administrative Measures on the Pilot Program of Consumer Finance Companies in July 2009 with the approval of the state council.

During the pilot process of the approval of consumer finance companies, the CBRC sticks to the principles that financial institutions should submit their applications voluntarily on the basis of commercialization and marketization. Following all the relevant requirements of the administrative measures on the pilot program, the CBRC assessed the qualifications, business goals, corporate governance, risk management mechanism, business streamline, operation system and professional team of each applicant. 

    According to the applications submitted by these three commercial banks, Bank of Beijing proposes to open a solely owned Bei Ying Consumer Finance Co. Ltd in Beijing; Bank of China intends to establish Zhong Yin Consumer Finance Co. Ltd in Shanghai jointly with Shanghai Brilliance Group Ltd. and Shanghai Lujiazui Finance Development Co.; Bank of Chengdu plans to set up Sichuan Jingcheng Consumer Finance Co. Ltd in Chengdu jointly with Hong Leong Bank from Malaysia. In addition, the application to open a consumer finance company in Tianjin is under process as well.

The above mentioned three commercial banks should complete the setting up stage within six months, which includes the arrangements of capital, staff, and business venue etc. The formulation of business scope and the regulations of internal risk control should also be ready at the end of the setting up stage. Following the completion of the setting up stage, the commercial banks should then submit the applications for the opening of consumer finance companies.