Morgan Stanley will become the first foreign bank being allowed to do renminbi business in China, Financial Times reported.
In order to protect local banks from foreign banks, which are usually much more competitive and market-oriented, Chinese monetary authorities banned foreign banks from offering renminbi-denominated products.
Morgan Stanley will be qualified to apply for a license of renminbi business after it acquired Nan Tung Bank, one of the few Chinese banks open to foreign ownership, the newspaper said.
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Morgan Stanley is on Monday expected to announce that it has obtained a coveted Chinese commercial banking licence, a surprise move that trumps its US investment bank rivals.
The licence will pave the way for it to offer renminbi-denominated products to corporations operating on the mainland. Typically, overseas banks have to operate for at least five years on the mainland, clear tough regulatory hurdles and obtain a commercial banking licence before being able to apply to conduct business in local currency.