China Development Bank may become fully commercialized next year as part of a
movement to reform the country's policy banks, Chinese media reported.
In
a meeting of related departments in the State Council last week, it was decided
to reform the country's policy banks into commercial ones, said the 21st Century
Business Herald, without identifying sources.
According to the report,
China Development Bank will be the pacesetter in the reform and may complete its
transformation in one year.
Traditionally, policy banks focus on
granting loans to government-encouraged projects. Through commercialization,
they will make decisions based more on profitability, as well as face more
stringent supervision.
The Chinese language newspaper said the research
bureau of the People's Bank of China is working on the reform plan.
But an
official from China Development Bank said they have not got any information on
the reform.
"Even if the reform is determined, it will be carried out
after the national financial conference (reported to be held before the Spring
Festival)," the official said.
"The commercialization of the policy banks
is necessary as economic and financial reform goes forward," said Han Meng, a
financial expert from the Chinese Academy of Social Sciences.
According
to him, if the performance of the policy banks are not good, they will burden
the national economy.
He said reform will make the market play a more
important role in the banks' operations, but their function as policy lenders is
likely to remain.
Chen Yuan, governor of China Development Bank, recently
said the bank is still focusing on development financing.
The 21st
Century Business Herald said the reform direction of policy banks is not toward
commercial banks like the Industrial and Commercial Bank of China. They will not, for
instance, involve retail banking and will not absorb savings.
The banking
regulator will continue to allow them to issue financial bonds to raise
capital.
But the policy banks may face even higher supervision
standards.
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