New terms for renminbi business by foreign banks

The China Banking Regulatory Commission (CBRC) has circulated a draft notice detailing the requirements for foreign banks to conduct retail business in the renminbi. The new rules form part of China's pledge to fully open the local currency market to foreign competition, pursuant to its agreement with the World Trade Organization.

Under the requirements, foreign banks may be required to incorporate their local operations in China as PRC-registered companies and capitalize their entities with at least Rmb1 billion (US$125 million), The Wall Street Journal reports.