China to Relax Rules on Foreign-Owned Rural Banks
China plans to make it easier for foreign banks such as HSBC Holdings Plc to set up rural operations as the government seeks to boost funding for farmers, said two people with knowledge of the matter.
Overseas banks will be allowed to manage operations in different counties through a single unit or a China-incorporated subsidiary, the people said, declining to be identified before an announcement. Banks must now oversee rural businesses through offshore entities with separate teams for each unit.
“This will spare them the trouble of having to either find a management team locally for every rural subsidiary or send experienced bankers from outside China,” said Roy Zhang, a Shanghai-based banking lawyer and partner at King & Wood, one of China’s largest law firms. “It helps contain costs and makes management much easier.”