China to let banks sets up insurance units - paper

SHANGHAI, April 13 (Reuters) - China plans to allow the country's four biggest state banks to set up insurance units in a pilot programme to encourage financial innovation, the China Securities Journal reported on Monday, citing an official of the banking regulator.

The China Banking Regulatory Commission (CBRC) and the China Insurance Regulatory Commission, the insurance watchdog, have reached an agreement on the scheme, the newspaper said, citing Lai Xiufu, an official of CBRC's supervision department.

China's Big Four banks are Industrial & Commercial Bank of China (1398.HK)(601398.SS), Bank of China (3988.HK)(601988.SS), China Construction Bank (0939.HK)(601939.SS) and Agricultural Bank of China.

China's insurance regulator has also given Bank of Communications (601328.SS)(3328.HK) and Bank of Bejing (601169.SS) approval to buy into domestic insurers, paving the way for the establishment of financial conglomerates in the country, the China Securities Journal reported on Friday.

China also plans to liberalise the banking industry by allowing individuals, non-financial institutions and industry associations to start lending businesses, the paper said, citing Liu Ping, vice head of research at the People's Bank of China.

The State Council, or China's cabinet, will study relevant laws legalising banking operations run by the private sector this year, the newspaper said.

($1=6.832 Yuan)