The new Regulations relax the access conditions for foreign banks. Under the new rules, a branch established by a wholly foreign-owned bank or by a Sino-foreign joint venture bank in the territory of the People's Republic of China shall be unconditionally allocated operating funds in RMB or in other freely-convertible currencies from its head office. The sum of operating funds allocated by a wholly foreign-owned bank or a Sino-foreign joint venture bank to its branch offices shall not exceed 60% of the total capital of the head office.
The new Regulations also relax the requirements for foreign banks' application to carry out RMB business. Foreign banks will be able to apply for such business if they have operated in China for at least a year, down from a previous requirement of three years, and also face no profitability requirement, a change from the profit-making for two consecutive years in the past, and if a foreign bank has one branch that has been approved to carry out RMB business, the other branches it establishes in China will no longer face business opening restrictions when launching RMB business.