BEIJING - Bank of Shanghai has been given permission for an IPO on the Shanghai bourse, the latest of China's small and medium-sized lenders to go public after nearly a decade of approval suspension.

The China Securities Regulatory Commission (CSRC) announced the decision Friday evening.

According to the bank's prospectus, it planned to raise at least 19 billion yuan ($2.9 billion) to replenish capital, the figure is likely to be at least halved as the authority only greenlighted a total of 15.5 million yuan for the bank and another 11 companies.

The second largest city commercial bank in China, Bank of Shanghai's annual profits have grown by an average of more than 20 percent for the last four years. It also owns four village banks, a funding company and a branch in Hong Kong.

China's city banks were formerly urban credit cooperatives, and unlike big commercial banks, they mainly serve small businesses and the regional economy.

Bank of Shanghai's application first applied for an IPO in 2008, but the procedure was suspended that year due to fears that such banks, often with poor risk control, may weigh on an A-share market that was already struggling. Frustrated by the restriction, many city banks turned to the Hong Kong market.

Approval resumed this year and, in June, the Bank of Jiangsu was the first city bank allowed to go public for eight years. Bank of Shanghai will be the fourth, and many more are still waiting for approval. There are more than 130 city commercial banks in China. Some banks that listed in Hong Kong are contemplating a return to the mainland market.

After the IPO, these banks can better serve small companies in need of cash, help the real economy and make financial reform easier, CSRC spokesperson Deng Ge told a press conference early this month.