BEIJING — The State Council announced new rules on Dec 20 that will ease market access for foreign banks in a move to further open up the domestic banking sector.

The Chinese cabinet published the amended rules on Dec 20, which will no longer require a specific amount of operating funds to be transferred from the parent foreign bank to its newly-established Chinese branch.

Previously, a foreign bank would have to unconditionally allocate at least 100 million yuan ($16.4 million) or the same value in other freely-convertible currencies.

The requirement has had a restrictive impact on capital replenishing at foreign banks’ China branches. Meanwhile, direct capital injection from parent companies to their branches would also be treated as foreign direct investment, which often involved a complicated approval process from multiple government agencies.

The new rules will also scrap the previous requirement that foreign banks or Sino-foreign joint venture banks should first establish a China representative office before they could set up branches.

Meanwhile, the new rules have relaxed requirements on foreign banks’ application to carry out Renminbi business. Foreign banks will be able to apply for such business if they have operated in China for at least a year, down from the previous requirement of three years. The banks applying for such business will also face no profitability requirement, a change from profit making for two successive years in the past.

Under the new rules, if a foreign bank has one branch already carrying out RMB business, its other branches will no longer face restrictions in launching the same business.

The new rules will take effect on Jan 1, 2015.