Recently, our journalist was informed from the Chongqing Finance Office that China Banking Regulatory Commission has approved the set-up of Chongqing Fumin Bank in Chongqing, classified as private bank. It becomes the sixth private bank approved after the first five pilot private banks, and the first approved private bank after promoting the normalization of private bank.
Promote private bank set-up orderly
During the session of National People's Congress and Chinese People's Political Consultative Congress this year, Fulin Shang, the president of China Banking Regulatory Commission disclosed that the application of 12 private banks entered into the validation stage and the set-up of private banks should be implemented in conformity of the principle “When it’s mature, it’s approved to set up”.
It’s not a surprise that Chongqing Fumin Bank was shortlisted. Previous analysis pointed out that as the first batch of private banks were located in first or second-tier cities, the central and western area is very likely to become the “main field” of next batch of private banks. Zhongfu Ma, the director of Chongqing Banking Regulatory Direction, made public speech at the 2016 Chongqing Financial Working Meeting, and pointed out that in 2016 great effort should be invested to drive the opening of Chongqing banking industry, and promote the set-up of private banks, Moreover, the western provinces, such as Hubei and Yunan, also showed great enthusiasm to private bank.
Ambitious industrial attitude, regulatory authority promotes innovation
At present, the first 5 pilot private banks develop properly. As shown by the figures, at the end of last year, the total assets of 5 banks are RMB 79400 million, debts are RMB 65100 million. They generally meet the regulatory indicators.
Among them, the related responsible of Webank told our journalist that Webank had launched “Weilidai” whose credit users were over 30000 million people. It has issued over 500 million cases of credit whose payees spanning in 549 cities in 31 provinces. At the same time, it has signed contract with 25 medium-and-small-sized commercial banks. 80% of the credit funds of “Weilidai”was offered by cooperative banks.
Apparently, private banks are tending to be common.
In fact, when the first batch of private pilot banks were approved, over 40 enterprises applied for setting up private banks; In January of this year, 22 private banks were shortlisted, among them 14 banks were shortlisted for the second or more time (validity of nomination is 6 months), and 8 banks were shortlisted for the first time, showing high market enthusiasm.
The regulatory authorities also have high expectation on private banks and provide favorable conditions for their set-up and development. In last June, the China Banking Regulatory Commission enacted the ”Guiding Opinions on Promoting the Development of Private Banks”，which determines the guidance of private bank qualification, approval procedure, improvement and governance, risk prevention, supervision enhancement, etc. In this March, the State Council approved the ” Opinions on Further Improving Key Emphases in Economic System Reform Work in 2016” of NDRC, which enhanced the in-depth reform of financial institutions, further expansion of integration of private funds into banking, and development of private banks.
Particular positioning is still the core
It’s private bank’s inherent responsibility and mission to complete the traditional banks properly. And it requires sufficient consideration of its positioning, such as “small deposit and small credit” of Webank and “public deposit and public credit” of Tianjin Jincheng Bank, etc. It’s worth noting that China Banking Regulatory Commission, Ministry of Science and Technology and the People's Bank of China jointly published the “Guiding Opinions on Supporting Banking Institutions to Enhance Innovation and Develop Science Innovation Enterprise Investment and Credit Integration Pilot ”, and announced the first 10 pilot banks, including Shanghai Hua Rui Bank. It matches to its positioning.
Previously, Esheng Cai, former deputy president of China Banking Regulatory Commission emphasized that the emerging of private bank was an important step if reform. They are created to “compensate short panel”. In fact, it determines clear requirement of the positioning and effect of private banks.
The preparation of Chongqing Fumin Bank also focused on the particular operation. As shown by news of Chongqing Finance Office, the positioning of Chongqing Fumin Bank is“inclusive finance bank for micro and small enterprises” in operation mode of “supporting to micro business and venture, integrating entities, based on two rivers, and covering the surrounding area”. It’s the first banking institution which focuses on the service for small and micro enterprises, “Rural Areas，Agriculture, and Peasantry” economies and other financially vulnerable groups, support and serve the “Public Venture, Public Innovation”. As the first private bank in the central and western area, Fumin Bank will further drive the construction of domestic important functional finance centre in Chongqing, serve local small and micro enterprises properly, and promote the financial inclusion.
It’s said that like other 5 private banks, Chongqing Fumin Bank won’t set up any branch but focus on the basic operation of traditional deposit, credit and transference at the beginning of operation.