Bank of China
Bank of China is one of the big four state-owned commercial banks of the People's Republic of China – the other three are Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China. Bank of China was founded in 1912 to replace the Government Bank of Imperial China, and is the oldest bank in China. From its establishment until 1942, it issued banknotes on behalf of the Government of the Republic of China along with the "Big Four" banks of the period: the Central Bank of China, Farmers Bank of China and Bank of Communications. Although it initially functioned as the Chinese central bank, in 1928 the Central Bank of China replaced it in that role. Subsequently, BOC became a purely commercial bank.
Shanghai pilots first credit rating database
The People's Bank of China (PBOC) has picked Shanghai to pilot a scheme to set up a credit rating system for individuals as demand for personal credit escalates.
Shanghai Zixin has been established between the central bank's Shanghai branch and the municipal government to collect private borrowers' credit history and repayment obligations from state and commercial banks and other legal sources.
Plans to start the scheme have been on the drawing board for two years but were only launched recently after the municipal government's robust support and Beijing's determination to cut down internal dangers posed to its banking system in the wake of the Asian financial crisis.
The company was established after the central bank sent study teams to the United States and Hong Kong to look at how their experiences could be adapted for local use.
A PBOC Shanghai branch official said: 'Setting up a credit system is not easy overseas and will be tougher in the mainland.
'But we still want to try and build up a database of private borrowers' credit standings, which will allow banks to use for reference later in extending personal credit.
'This is crucial to our on-going plans to cut down the level of potential bad debts in the banking system.' Only state and domestic commercial banks will take part in the scheme initially although foreign banks could be included after they gain access to retail banking.
Under a World Trade Organisation deal between Beijing and Washington in November, foreign banks could collect deposits from and extend loans to mainlanders five years after the mainland is admitted to the global trade body.
There was initial resistance from some banks to the scheme, particularly those which had been more aggressive and successful in winning retail customers.
'Their thinking is, why should we share our bigger base of information with our competitors, who could steal our clients.
'But we told them that the scheme would help them, too, because the database and credit rating will help lower the risks of lending to customers,' the official said.
Shanghai mayor Xu Kuangdi had thrown his weight behind the project by strongly urging state and commercial banks to give unequivocal support to the scheme, the first planned in the country.
'The central bank wants to expand the project to other parts of the country at a later stage,' the official said.
Shanghai has been chosen to pilot the scheme because its legal framework and its banking infrastructure are more advanced than other cities and because of large growth in personal housing loans in the past two years.