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China lifts 1 branch in 1 city rule for foreign banks

China has announced that it will lift a ban on foreign banks from opening more than one branch in a Chinese city, a move which could lead to Indian banks setting up more branches in the country. ‘Foreign banks with sound risk controls and operation should be allowed to open more new branches in one city to enhance their capability to bolster the real economy,’ the China Banking Regulatory Commission (CBRC) said.

As one of the moves to make the market access conditions for Chinese and foreign banks ‘more uniform’, the CBRC also decided to abolish the ‘minimum operating capital’ for setting up a branch bank. Instead, a branch bank can be established so long as the applicant has the ‘disbursement capabilities for operating capital’ and ‘operating funding is in place when the new branch is set up’.
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