Guangdong has submitted an application for the establishment of three private banks to the China Banking Regulatory Commission, Shanghai Securities News reported.

The three applicants are from Guangzhou, Shenzhen and Jieyang.

"The process begins with regional applications to the provincial government, who seeks advice from the financial department before submitting it to CBRC," said an official from the financial department of Guangdong province.

Guangdong boasts abundant private funds that accounted for more than 35 percent of the total stakes in commercial banks in cities, 80 percent in commercial banks in rural areas, and 50 percent in county-level banks, as of the end of June, according to the banking regulatory authority in the province.

It is imperative to set up private banks, said Lin Jiang, a financial professor at Sun Yat-sen University. Otherwise, small and medium enterprises will face continuing difficulties in obtaining loans, Lin added.

A number of regions have filed for permission after the State Council issued a document in July encouraging the establishment of independent private banks.

The application for the first private bank in Yunnan province is also being reviewed, according to a newspaper in the province.

Most of the enterprises that have initiated the application are leading private businesses in Yunnan, indicating the thirst for capital in the private sector.