THE Bank of Montreal, Canada's third-largest bank, wants China to relax its quota system and allow more than one bank from the same country to open offices in major cities. China's central bank recently approved plans by the Royal Bank of Canada to open a branch in Shanghai. Under the existing quota system designed to space out applications from the same country, another Canadian bank's request for an office in the same city must wait for two to three years. ''The quota system is less relevant at this time in China's reform. China should continue to open up and invite major banks to set up a presence there,'' said Matthew Barrett, president and chief executive of Bank of Montreal. ''I hope the time frame for banking licence applications can be shortened.'' The bank has been actively studying the China market. Convinced that global economic power is gradually shifting to the Pacific region, Mr Barrett believes China will emerge as a legitimate economic superpower. To cope with this development, the bank already has a branch in Hong Kong and a Beijing office, and an office in Guangzhou has just opened. The bank is eager for a presence in Shanghai to form a ''good symmetry''. Bank of Montreal is aiming for a different style of banking. ''You ought to differentiate your bank from the others,'' Mr Barrett said. In its home market, the bank has consistently cut its prime lending rate ahead of its rivals in the past year, helping it become the fastest-growing bank in Canada for the past three years. Compared with other foreign banks in the region, Mr Barrett said Bank of Montreal was the only truly continental bank, with a strong presence in both Canada and the United States. In the US it is represented by Harris Bankcorp, its wholly owned subsidiary based in Chicago with nationwide franchises in several lines of business. ''No other Canadian bank can offer customers such a combination of expertise in North America,'' he said. Positioning itself for the enormous China market, the bank is on the lookout for alliances with local banks, either through joint ventures or strategic agreements. ''Banking is a business that faces fierce competition but also requires co-operation,'' Mr Barrett said. This expansion is to build on the growing presence of Canadian business in the region, giving rise to an emerging trade finance market. ''Prominent Canadian businesses are increasingly involved in the region, especially in the field of infrastructure development, environmental technology and forestry, in which Canadian companies have expertise,''he said. He said the bank's chosen way to move ahead was to first deploy expertise where growth was anticipated. The office would then establish corresponding banking relationship with local banks. This would be followed by lining up formal strategic alliances with appropriate parties, Mr Barrett said. Its Hong Kong branch provides services including offshore trust, Canadian project finance and private banking with a Canadian focus.