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Shanghai's first private bank opens

Updated: 2015-05-25

( chinadaily.com.cn )

Huarui Bank, Shanghai's first private bank, officially opened on May 23 after three months' trial operation.

The bank, registered in Shanghai (Pilot) Free Trade Zone with a capital of 3 billion yuan ($484 million), will mainly serve small and micro enterprises that have difficulty getting loans from large State-owned banks.

On its opening day, the bank signed an agreement with Shanghai Federation of Industry and Commerce, pledging to cooperate to bring out the vitality of private economy.

"We will design special financial products to help small and micro enterprises get financing quickly, easily and economically," said Wang Junjin, a major shareholder of the bank and chairman of JuneYao Group.

Many small companies resort to underground lenders for financing at a cost several times higher than what is charged on loans extended in formal banking system.

Huarui bank will exempt small borrowers from account management fees and halve commission fees on bill acceptance and related charges. It has cooperated with several local venture capitals to provide financial services for start-ups devoted to scientific and technological innovation.

Located in Shanghai FTZ, the bank will support FTZ enterprises in cross-border financial business, helping them cut funding costs and ease transfers, according to Ling Tao, chairman of Huarui Bank.

The bank has cooperation agreements with many financial institutions. So far, it has been granted 10 billion yuan of interbank borrowing credit from a dozen banks in the city, including China Development Bank, China Merchants Bank and Shanghai Pudong Development Bank.

Huarui Bank is one of the five private banks approved by the China Banking Regulatory Commission (CBRC) last year. The others are based in Tianjin, Wenzhou in Zhejiang province and Shenzhen in Guangdong province, in a bid to bring more private players into the State-dominated banking industry.

The Shenzhen bank will focus on serving individual consumers as well as micro and small enterprises. The Wenzhou lender will target small companies, individually-owned businesses and community residents, while the Tianjin bank will prioritize local corporate banking.

Shanghai-based JuneYao holds 30 percent of Huarui Bank, and clothing company MetersBonwe owns 15 percent. Ten private firms hold the remainder.

Compared with existing commercial banks, the private banks will be subject to the same regulation and supervision, according to the CBRC.

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