China explores easing bank ownership limits for capital
Chinese regulators are considering allowing major investors to hold stakes in more banks. The move aims to broaden funding options amid a slowing economy.
Authorities in China are considering a relaxation of shareholding limits for major investors in the country's commercial banks, a move designed to expand capital-raising avenues for lenders facing economic headwinds. The National Financial Regulatory Administration (NFRA) reportedly held discussions in January regarding the potential policy shift, which would allow certain investors to hold significant stakes in a larger number of financial institutions than currently permitted.
Under existing regulations implemented in 2018, a single investor is restricted to holding a 5% or greater stake in no more than two commercial banks, or a controlling interest in just one. The proposed changes would permit shareholders to become major investors in one or two additional lenders, provided they receive regulatory approval. The NFRA is expected to review these applications on a case-by-case basis, prioritizing banks with urgent capital needs and vetting the qualifications of the participating investors.
