BNP Paribas China on Monday said the bank received approval to underwrite yuan-dominated bonds, becoming the third foreign bank to receive such license in China.

The license, called a Type B license, will allow the bank to act as a lead underwriter on yuan-denominated bonds, or panda bonds, issued by foreign corporate issuers in China, according to an announcement by China's National Association of Financial Market Institutional Investors on Friday.

CG Lai, BNP Paribas China's deputy chief executive officer, said with the growing maturity of multi-national corporations' operations onshore in China, foreign parent companies are increasingly seeking to tap the domestic bond market as an important and highly cost-effective source of yuan funding to support their Chinese expansion needs.

"With this license, BNP Paribas China can also help international issuers to tap the world's largest yuan liquidity market for their offshore projects, which is key to promoting the yuan's internationalization," he said.