TEXT OF STORY
SCOTT JAGOW: Today, China laid out new rules that will govern foreign banks operating in the country. Ruth Kirchner reports from Beijing.
RUTH KIRCHNER: The new rules place tough restrictions on foreign banks. They must register an entity and incorporate it locally if they want to offer services like loans and credit cards.
And foreign banks must also set aside $120 million in registered capital. In turn they will be allowed to conduct business in the Chinese currency, the Yuan, for the first time.
But the government has taken measures to control the expansion of foreign banks, says Ivo Naumann of Roland-Berger consultancy in Shanghai. says the government also wants each branch to have operating capital of 12 million dollarsa€¦.
IVO NAUMANN: You still require for each new city that you want to enter, a new license and that is still something where the Chinese regulators have some leeway where they could potentially slow down the expansion of foreign players.
But analysts say this strategy is unlikely to impede global retail banking giants such as Citigroup or HSBC.
In Beijing, I’m Ruth Kirchner for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.