Tencent Given Approval to Establish A Private Bank in Qianhai
Tencent Technologies is leading the establishment of a private bank in the Qianhai economic zone. The Shenzhen based company has confirmed that the establishment of the bank is part of a pilot program that is initiated by the national banking regulator in hopes to open up China’s closely guarded banking sector.
Tencent applied to be the lead in the establishment of a private bank in Qianhai although the project is still under qualification examination stage and without disclosing any details analysts are saying that the Tencent’s experience with the Internet industry will enable it to fulfill the financial innovation and provide the much need services with more efficiency with a greater scope. The chairman for the China Banking Regulatory Commission also stated that the country is planning to establish five more private banks on a trial basis before expanding to more places. The first five banks will be setup in Shanghai, Tianjin, Zhejiang and Guangdong provinces.
Ten private companies from Tencent to Alibaba have been selected to participate to work in the preparation for setting up these five banks and each of the five banks will be co sponsored at two private capital providers. No timetable have been released for the launch of these but sources sa that these banks will be approved once the conditions are right.
Guangdong province applied to create three private banks including one bank placed in Qianhai that will include a privately owned Shenzhen firm and a listed company. While Alibaba also confirmed that it will be joining in the creation of the pilot project, the company’s participation confirms the competition of the two internet giants that has already become heated especially in the fields of online wealth management and taxi apps.