The big four state-owned commercial banks will be allowed to expand their exposure to tap funds in the country's debt market, according to the head of the mainland central bank.
They would be allowed to issue another batch of long-term bonds, local reports quoted Dai Xianglong, the governor of the People's Bank of China (PBOC), as saying.
The bond issues would be part of a capital increase this year intended to raise the capital-adequacy ratios of the four.
Mr Dai said the bonds would be sold to retail investors at 'relatively high coupon rates'.
Regulations governing the issue of bonds by domestic banks are now being drafted by the PBOC. Pending State Council approval, the legislation would make similar bond issues an important means for bank fund-raising, according to a press report.
In 1998, the Ministry of Finance issued 270 billion yuan (about HK$253 billion) worth of special bonds to recapitalise the four big state banks - the Bank of China, the Industrial and Commercial Bank of China, China Construction Bank and the Agriculture Bank of China.
All the bonds were sold to commercial banks, according to China Daily. The issue helped the industry report an average equity to assets ratio of 4.7 per cent at the end of 1999, said a recent Standard & Poor's report.
