China mulls looser banking rules amid foreigners’ complaints

SHANGHAI, Sept 21, 2006 (AFP) – Financial regulators in China are mulling loosening regulations for foreign banks after criticism that proposed lending rules were far too strict, a state newspaper said Thursday.

China, which is gearing up to open its financial services in line with commitments made to the World Trade Organization when Beijing joined in late 2001, proposed minimum yuan deposits of one million yuan (125,000 dollars).

Citing unnamed sources, the China Daily reported that the China Banking Regulatory Commission and the Ministry of Commerce were considering lowering the deposit limits after vociferous complaints from foreign banks.

“The two sides have been in continuous discussion and working closely in the past few days,” the newspaper quoted a banking regulator as saying.

“This may finally lead to a lower threshold than the earlier proposal in order to get (China) in line with the WTO principle for a wider open market.”

A draft of the rules submitted in June stated that foreign lenders could not provide loans of more than 10 percent of their registered capital to a single client.

Banks had to also keep overall lending below 75 percent of their total deposits, the newspap