Tencent Holdings Given License to Open Private Bank Based in Shenzhen
One of the largest internet companies in Shenzhen, Tencent Holdings has been given the license by the nation’s top banking watchdog to create s private bank with its headquarters to be based in Shenzhen. The bank will be one of the five private banks in a pilot program that was approved by the central government that is said to a major step in opening up of the closely guarded banking sector of the country.
Sources from the Shenzhen Financial Service Office stated that Tencent Holdings is looking for experienced bankers to mapped put their strategies. The China Banking regulatory Commission has also said that the private banks will be jointly invested by Tencent and Shenzhen Baiyeyuan Investment Co and will be focusing their business on whole sale deposits and small loans.
An economist teaching at the Tsinghua University stated that private banks must serve communities by providing loans to small and medium enterprises such as barber shops, fruit sellers and restaurants just like community banks give out loans in the US. Another expert coming from Yale University who is an expert on financial theory, emerging markets and securities valuation said that the country needs around 20,000 to 30,000 banks in serving different communities nationwide leaving plenty of room for new private companies to develop properly.
These pilot program should be able to help provinces that are short of financial facilities since community banks tend to prosper in less develop areas.