Five Chinese banks are expected to soon begin dealing in financial leasing, becoming the first batch of banks to pilot the emerging industry.

The Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, China Merchants Bank, and China Minsheng Banking Corp have submitted applications to the Chinese government to deal in financial leasing, a source close to the five banks said yesterday.

Related readings:  Minsheng to launch financial leasing firm  Financial leasing business opens to banks

According to the source, who refused to be named, the government is expected to start processing their applications in March since a rule that allows banks to deal in financial leasing took effect on March 1.

The rule, issued in January by the China Banking Regulatory Commission (CBRC), allows both locally and overseas-incorporated commercial banks to directly set up financial leasing companies.

This is the first time the country has permitted commercial banks to deal in financial leasing since 1997, when they were required to withdraw from the business after the Asian financial crisis.

Dong Wenbiao, president of Minsheng, said on Monday that the bank is actively cooperating with the State Grid Corp of China and a Tianjin-based Airbus China assembly plant to set up a financial leasing joint venture in which the bank will hold 51 percent stake.

If approved, the five banks including Minsheng are expected to begin financial leasing soon after.

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