The approval would not be a problem because the State Council said last month that it would promote a pilot project in which listed commercial banks could buy products on the exchange's bond market, the source said.

According to Caijing magazine, a CBRC official said the commission would not oppose the decision if the CSRC was already well prepared for the change.

Guotai Junan Securities senior bond analyst Lin Zhaohui said the entry of listed commercial banks into the exchange's bond market would diversify the sources of eligible investors, lifting the market's activity and trading volume.

The exchange's debt market comprises government bonds, corporate bonds, enterprise bonds and equity warrant bonds.

Exchange markets account for a very small share of the entire bond business on the mainland, claiming just 4 per cent of bond transactions by traded value. They also account for no more than 7 per cent of the primary bond issuance business and contribute a negligible 3 per cent in terms of turnover, according to financial data provider Wind.

Mainland commercial banks have been allowed to invest only in the interbank bond market since 1997, while some non-banking financial institutions including funds, securities and insurance firms have been able to invest in the exchange's bond market.

The mainland has 14 listed commercial banks and their assets account for more than 55 per cent of the industry's total.

Shenyin & Wanguo Securities senior bond analyst Qu Qing said the entry of listed commercial banks into the exchange's bond market would not aid liquidity because of the small scale of corporate bonds.