China will further open up its banking sector to foreign investments. It will ease restrictions on foreign banks so they could have easier access to the local market and start business operations in the country, according to the China Banking Regulatory Commission.

The nation’s top banking regulator said it will launch various policies and scrap others toward this end. The requirement that foreign banks should operate for more than one year before they seek to conduct renminbi business will be abolished.

By lowering the threshold for foreign banks to start renminbi business, China will take a step forward to promote the international use of its currency, said a foreign bank executive who sought anonymity because he is not authorized to speak on record.

Previously, only locally incorporated foreign banks in China were allowed to conduct renminbi business. The banking regulator will remove this requirement so that the foreign banks, which have set up branches in China, can also apply to do this type of business.

The effort will benefit foreign banks, especially those that need to launch renminbi business, as they are based in the economies associated with the Belt and Road Initiative, but do not have a large demand for such business, the banker said.

According to the CBRC, it will also expand the scope of business operations of foreign banks in China, support their branches to do business related to government bonds, and relax requirements for these branches to take retail renminbi deposits.

The current rules only allow foreign bank branches in China to take fixed-term renminbi deposits of at least 1 million yuan ($157,908) from Chinese citizens.

Moreover, China will ease requirements on the size of assets for foreign banks to be qualified for the underwriting of bonds, including green bonds, short-term corporate bonds and agriculture-related bonds, said a government official with knowledge of the matter, who sought anonymity as he is not authorized to speak on financial regulations.

By announcing its plan to launch new regulatory policies, China has shown it will open up its financial markets to foreign banks, the official said.

“The regulator will encourage foreign banks to conduct more diversified business, especially in the areas of asset management and institutional banking, in which they have competitive advantages,” said Zhang Xingrong, managing director of the Institute of International Finance at Bank of China Ltd.

“While the effort will increase market competition, it will also bring opportunities for business cooperation between Chinese and foreign banks in terms of overseas investment banking and the offering of financial services to high net worth individuals,” Zhang said.

Looking ahead, financial regulators are expected to allow more foreign banks to set up joint ventures in the sectors including securities, insurance, funds and financial leasing, he said.

Societe Generale, a French multinational financial services group, plans to launch a joint venture securities company in China as the controlling shareholder, with an investment of 1 billion yuan.

It is looking for one or several partners in the run-up to detailed rules on market access for foreign investments, according to a report on the website of The Economic Observer, a Beijing-based weekly, in January.

Back in December, HSBC Qianhai Securities Limited, the first joint venture securities company majority-owned by a foreign bank, formally opened for business in Shenzhen, Guangdong province.

The joint venture is 51 percent owned by The Hong Kong and Shanghai Banking Corporation Limited and 49 percent by Qianhai Financial Holdings Co Ltd.