China's opening up of its banking sector to foreign competition has not brought cheers for the Indian banks as overseas banks seeking entry into the country must bring in 200 million yuan, double the previous minimum capital requirement, banking industry sources said on Tuesday.
Majority of the foreign banks in China are not in a position to benefit from the new regulations effective from December 11 as they are not in a position to bring in such huge capital, banking industry sources said.
Rather most of the foreign banks in China are at a disadvantage as the minimum capital requirement for upgrading representative office into branch has been doubled from $12.5 to $25 million, the sources told PTI when asked to comment on the deregulation of the Chinese banking industry.
New regulations on the administration of foreign-funded banks took effect on Monday, marking the full opening of China's banking sector to foreign competitors as per Beijing's commitment while joining the World Trade Organisation on December 11, 2001.
The
banks that will benefit by the new Chinese banking regulations are the top ones like Citibank, HSBC, Standard Chartered Bank, the sources said.
As per the new guidelines, there are basically two measures of importance from the point of view of a newly opened foreign bank.
Firstly, the waiting period for the Chinese currency, RMB licence has not been changed. It continues to be two years of profitable business and three years of functioning as per old norms.
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