China is considering relaxing rules that restrict how many commercial banks a
single investor can hold a major stake in, as regulators seek to broaden
capital-raising channels for lenders facing economic and property-sector stress.
The National Financial Regulatory Administration (NFRA) is reportedly exploring
allowing qualified investors to become significant shareholders in additional
banks beyond current limits, subject to case-by-case approval.
The proposed changes would mark a partial reversal of 2018 rules introduced to
curb concentrated ownership risks after past financial failures, including cases
such as Baoshang Bank. The easing would aim to attract more capital from
well-capitalized investors, including state-backed insurers, to support weaker
regional banks that struggle with profitability and bad loans.
China’s top leadership has also vowed to “strengthen capital replenishment
through multiple channels,” according to a government work report delivered at
the annual meeting of the National People’s Congress earlier this month,
reinforcing the policy push behind broader funding reforms. Officials say
discussions are still at an early stage, but the goal is to enhance financial
stability and diversify capital replenishment channels across the banking
sector.
