BEIJING - China's banking and insurance regulator has given the nod to the establishment of the first wealth management company owned by a rural commercial bank.

The southwest-based Chongqing Rural Commercial Bank has gained approval from the China Banking and Insurance Regulatory Commission (CBIRC), according to a statement on its website.

A wholly-owned wealth management subsidiary will be set up in the city of Chongqing, with a registered capital of 2 billion yuan ($285 million), which will upgrade the bank's financial management business, promote its profit growth and form a professional team.

In December 2018, the CBIRC released guidelines for commercial banks to conduct wealth management businesses to offer more financial products to meet the demands of the real economy.

The commission had approved 16 banks to set up wealth management units by the end of January and encourages the establishment of more such units owned by domestic and international banks with high-risk management levels, said Cao Yu, vice chairman of the CBIRC.