A bank partly backed by Tencent Holdings Ltd has won approval to start operations, making the Shenzhen Qianhai Weizhong Bank the first of five new private lenders to start operations.
The institution, also known as Webank, is expected to open within a month, the Economic Information Daily reported on Tuesday.
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Tencent, which is the largest shareholder with a 30 percent stake, confirmed that it had received the green light from banking authorities in the southern city of Shenzhen, but the company did not give an exact date for starting business.
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The bank has registered capital of 3 billion yuan ($484 million). It will focus on personal banking and lending to small and medium-sized enterprises, said Tencent.
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The company, which owns China's largest online social networking systems (QQ and WeChat), said it will offer innovative products and services.
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The other banks will be in the cities of Tianjin and Shanghai, as well as Zhejiang province. They mark a gradual opening of China's State-dominated banking sector.
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Wu Qing, a financial researcher at the Development Research Center of the State Council, said he has great expectations for the role of private banks.
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Wu said that compared with the huge market shares held by traditional banks, the private banks will not be big enough to reshape the industry.
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"But innovation and the Internet 'gene' in some of these private banks can bring huge changes to the system in terms of pushing the traditional banks to stay ahead of the competition," he said.Â
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A bank partly backed by Tencent Holdings Ltd has won approval to start operations, making the Shenzhen Qianhai Weizhong Bank the first of five new private lenders to start operations.
