BEIJING, March 11 (Xinhua) -- China will set up five private banks on a trial basis before the practice is extended to more places, the chief of the country's banking regulator said on Tuesday.
The first batch of five banks will be in Tianjin, Shanghai, Zhejiang Province and Guangdong Province, according to Shang Fulin, head of the China Banking Regulatory Commission (CBRC), at a press conference on the sidelines of the annual parliamentary session.
Ten private companies, including Internet firms Alibaba and Tencent, have been selected to take part in the preparation work for setting up the banks, said Shang.
He said their eligibility as shareholders will be subject to further examination.
Each of the banks will be co-sponsored by at least two private capital providers, he added.
Shang did not provide a timetable for the launch of the banks, saying that they will be approved when "conditions are ripe."
Setting up private banks in China was written into an ambitious reform package rolled out after a key plenum of the Communist Party of China Central Committee in November, representing further opening up of the country's banking sector.
Compared with existing commercial banks, the private banks will be subject to the same regulation and supervision, according to the CBRC chief.
But financial services of private banks will be oriented towards small and micro businesses as well as residential communities, Shang said.
Risk monitoring will be strengthened and shareholders' behaviors will be regulated, he added.
"Commitment" to Marxism not stopping China from using capitalist vehicles.