The mainland's central bank has approved applications from Standard Chartered Bank and Nanyang Commercial Bank to conduct yuan business in Shenzhen. 'The approvals have already been made, and [the banks] will start business in the near future,' said Luo Baichuan, the deputy governor of the Shenzhen branch of the People's Bank of China (PBOC). The banks are the third and fourth to receive central bank approval to conduct local currency business in the special economic zone. The Shenzhen branch manager for Standard Chartered, T.K. Ho, said the PBOC notification arrived on Monday. 'We have everything ready,' Mr Ho said. 'We need to do some preparation and hope to start business in early January.' Mr Luo was speaking at a joint reception hosted by HSBC and the Bank of East Asia to celebrate the launch of their yuan business. Both banks received yuan licence approvals last month. Mr Luo called on the yuan-licensed foreign banks to help build a 'Great Wall' against financial risk. 'With the start of yuan business, the connection between foreign-funded financial institutions and their local counterparts has grown closer,' he said. HSBC head of China business Eddie Wang said the start of yuan trade in Shenzhen 'is not only an important development in China's financial system reform, it also represents achievement of Shenzhen's economic development'. The Shenzhen yuan-licensed foreign banks will operate under the same prohibitive restrictions as banks in Shanghai, the mainland's only other city where foreign banks are allowed to conduct yuan business. Those restrictions allow the banks only to do business within the municipality and take deposits and compete for business with overseas nationals and foreign-invested and wholly foreign-owned enterprises. Lu Hong, Shenzhen branch manager for the Bank of East Asia, shrugged off such prohibitions and said the yuan licence provided the bank greater business opportunities, particularly in the city's real estate sector.