China regulator says will allow wholly-owned foreign banks in China

FILE PHOTO: Chinese 100 yuan banknotes are seen in a counting machine while a clerk counts them at a branch of a commercial bank in Beijing, China, in this March 30, 2016 file picture. REUTERS/Kim Kyung-Hoon/File Photo

SHANGHAI (Reuters) - Foreign banks will be allowed to set up wholly-owned banks and branches in China, according to draft rules issued by the banking and insurance regulator on Thursday.

In a statement on its website, the China Banking and Insurance Regulatory Commission (CBIRC) said that branches of foreign banks would be required to keep more than 8 percent of yuan risk assets as yuan-denominated operational funds and reserves.

Chinese citizens would be allowed to establish time deposits exceeding 500,000 yuan in domestic branches of foreign banks, the draft rules said.

Reporting by Winni Zhou and Andrew Galbraith; Editing by Simon Cameron-Moore