With the opening of Shanghai's free trade zone last Sunday, Chinese and foreign banks could look forward to seeing lax regulations. This was revealed by China Banking Regulatory Commission (CBRC) Shanghai branch Head Liao Min. Liao said adjustments on the loan-to-deposit ratios would be done in banks in the free trade zone. He also said regulatory requirements on cross-border financing would also be relaxed as well.

Moreover, Liao also revealed that the government would be looking into relaxing the regulations for foreign banks that would want to turn their representative offices into full-fledged outlets in the free trade zone. He added that the government would hasten the application process for overseas lenders seeking yuan settlement permits.

Reuters lauded the key adjustments since foreign banks that want to do business in the mainland complained of slow approvals. However, Chinese state media have reported that these reforms were not likely to be put in place this year.