Beijing, Jan 06: China today unveiled a "bold" pilot project to reform two of the country's largest public sector banks into joint stock holding entities by pumping in 45 billion dollars from the swelling foreign exchange reserves. The State Council, China's Cabinet, has decided to choose two major state-owned commercial banks, the Bank of China and China Construction Bank, for pilot reform to turn them into joint-stock banks.
"The reform aims to turn the two selected banks into commercial banks in the real sense," a senior Cabinet official said.
They will establish standard corporate governance and an internal system of clearly defined rights and responsibilities, as well as a good mechanism for fiscal restraint and internal risk prevention.
Describing it as "a major move", a spokesman of the State Administration of Foreign Exchange (SAFE) said the allocation of 45 billion dollars of the country's foreign exchange reserve was necessary for a "bold" banking reform.
The reform is aimed at turning the banks, two of the "big four" state-owned commercial banks, into banks in the real sense.
The reform and the use of national forex reserve for the endeavour constitute "a major move to help the country prevent and mitigate financial risks and upgrade its financial system," he said. Bureau Report