A pilot scheme to create three to five private banks has been approved by China's banking regulator, in a bid to up financial support for struggling smaller firms, reports Reuters.
The China Banking Regulatory Commission (CBRC) said it would maintain "prudential regulatory standards" when approving private banks. The first would, it said, be set up only when conditions are mature.
China's banking is dominated by large, state-owned lenders, with only one private bank among the country's 10 largest lenders. But leaders have promised to liberalise the sector in order to increase lending to smaller firms, over whom big banks are often remiss.
Despite this, SMEs make up 60 per cent of China's GDP, accounting for some 75 per cent of new jobs, but weaker global demand and tight credit means they're floundering.