People walk at the headquarters of Alibaba in Hangzhou, Zhejiang province, April 23, 2014. [Photo/Agencies]

BEIJING - China has approved the opening of Alibaba-backed Internet bank "MYbank", in the latest development of a pilot program to bring in private players in the State-dominated sector.

MYbank, mainly funded by Zhejiang Ant Small and Micro Financial Services Company owned by Alibaba Chairman Jack Ma and his colleagues, has a registered capital of 4 billion yuan ($655 million), according to the approval document by Zhejiang Banking Regulatory Commission.

Other founders include the Shanghai-based conglomerate Fosun Group, China's largest auto parts supplier Wanxiang Group and Ningbo Jinrun Asset Management Company.

The bank will center on financial services for small and micro business, as well as online consumers through the Internet platform. No physical branches will be opened, said the document.

Specifically, the bank will target financial products for deposits below 200,000 yuan and loans of less than 5 million yuan.

With Wednesday's approval in place, China's first batch of five private banks announced last year, including the Tencent-backed Webank and Wenzhou Minshang Bank Co Ltd, have all been green-lighted for operation.

Previously, China has only one private bank, China Minsheng Bank, which was founded in 1996 in Beijing. Listed in both Shanghai and Hong Kong, Minsheng was the country's first national bank founded by private capital.