Caixin
Dec 22, 2020 05:48 AM
FINANCE

Postal Saving Bank Gets Direct Banking Approval

What’s new: China’s Postal Savings Bank (PSB) won approval from the top banking industry regulator to set up the country’s third independently operated direct bank.

The new venture, named Youhui Wanjia Bank (邮惠万家银行), will be registered in Shanghai and fully owned by the PSB with initial investment of 5 billion yuan ($765 million), the bank said. The new bank will coordinate online and offline services to focus on rural and agricultural businesses, according to the PSB.

Direct banks have no physical branches and offer services only over the internet or telephone.

The background: PSB’s announcement followed a similar disclosure last week by China Merchants Bank Co. Ltd. (CMB) that it was cleared to set up a direct bank joint venture with Jingdong Digits Technology Holding Co. Ltd. Caixin learned that PSB won approval at the same time as CMB.

The approval came four years after China Citic Bank Corp. and search engine Baidu Inc. were given the green light to set up AiBank, the country’s only direct bank with independent legal person status.

China has different types of licenses for internet banks —the ventures of PSB and CMB have a license for direct banking with an independent legal entity status (独立法人直销银行). Traditional banks operate their direct banking platforms as internal divisions using their existing bank licenses. Other new online lenders, including Ant Group-backed MYBank and Tencent’s WeBank, have private bank (民营银行) licenses.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Related: After Four-Year Hiatus, China Hands Out Another Independent Direct Banking License

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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