China 'not allowing smaller banks to list on mainland'

27 June 2012

Small and medium-sized banks in China are still being prevented from listing on the mainland as regulators weigh up the pros and cons of allowing them to do so.

That is according to the state-backed China Securities Journal, which noted that policymakers in the Asian superpower remain unsure as to whether this would be beneficial to the country's financial system, Reuters reports.

At present, such banks are not permitted to list on the mainland as officials at the China Securities Regulatory Commission (CSRC) believe allowing them to do so could further dampen investor confidence in the Chinese share market.

In addition, the body may be concerned about the possibility of city commercial banks expanding their business beyond their current regional boundaries as the nation continues to battle against economic slowdown.

However, such enterprises are still permitted to list their operations in Hong Kong in stead of the mainland - a route the Bank of Shanghai is planning to take.

By Asim Shah

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