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Banks allowed to invest funds

(Shenzhen Daily)
Updated: 2006-07-03 09:58

The banking regulator said Friday it has approved four domestic banks and two foreign banks to invest funds for domestic clients in fixed-income products offshore.

Approvals have been handed to Industrial and Commercial Bank of China, China Construction Bank Corp., Bank of China and Bank of Communications, the China Banking Regulatory Commission said in a statement on its Web site.

The mainland branches of HSBC Holdings PLC's Hongkong & Shanghai Banking Corp. and Bank of East Asia can also invest their clients' assets overseas, it said.

The government announc- ed in April that it would let banks park client funds abroad as part of the landmark qualified domestic institutional investor (QDII) program, which was aimed at loosening capital outflows to balance international payments and take the heat off the yuan currency.

The banking regulator reiterated recent calls to banks to pay attention to foreign exchange and interest rate risks when investing in overseas markets.

It was still studying applications made by a number of other banks including China Everbright Bank and CITIC Bank as well as a number of other foreign banks, it said.