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China Tightens Bank Shareholding Rules after Lifting Cap on Foreign Stakes

 

China Tightens Bank Shareholding Rules after Lifting Cap on Foreign Stakes
China Tightens Bank Shareholding Rules after Lifting Cap on Foreign Stakes

28 Nov 2017

Introduction

China’s Banking Regulatory Commission (“CBRC”) imposes stricter shareholding rules on Chinese commercial banks, which insist all individual investors seeking more than 5% stake in a Chinese commercial bank must get the baking regulator’s approval before entering a deal. The series of draft rules issued by the CBRC on 16 November 2017, came after China announced that it will scrap the cap on foreign investments in mainland commercial banks. The rules prohibit an investor to circumvent the approval cap of 5% by using related parties or financial products it controls to take up a stake as the CBRC moves to close all regulatory loopholes.

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