Four foreign banks received approval from the Chinese government to establish locally incorporated subsidiaries in China, but it's still unclear when the institutions will be allowed to start accept deposits in yuan from Chinese citizens. The China Banking Regulatory Commission said Tuesday it has approved the applications of HSBC Holdings PLC's Hongkong & Shanghai Banking Corp., Standard Chartered Bank PLC, Citigroup Inc., and Hong Kong's Bank of East Asia Ltd. to operate in China through a legally incorporated entity. Chinese citizens, who sit on $2 trillion in savings, are understandably considered a huge banking opportunity, but foreign banks have until now been forbidden from offering them loans and deposits in yuan. Before any of the banks can begin operating they must first incorporate, restructure their computer systems subject to government approval, and get local approval for each city in which they operate. Standard Chartered, first off the block with its application, said yesterday that subject to regulatory approval it hopes to commence operations within the next month.
Sources: Wall Street Journal
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Conference call transcript: Citigroup Q4 2006
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