China officially relaxed rules on foreign banks yesterday, allowing them to offer renminbi banking services to Chinese companies in 13 mainland cities, including Shanghai, Guangzhou, Tianjin and Shenzhen.

　　"The opening will provide foreign banks new and enormous opportunities to exploit their local currency businesses in China," said Liu Mingkang, chairman of the China Banking Regulatory Commission.

　　Previously, overseas banks could only offer banking services in local currency to foreign-funded enterprises, expatriates and residents of Hong Kong, Macau and Taiwan.

　　The cbrc also announced yesterday that a single overseas financial institution can purchase up to 20 percent of a Chinese bank, up from the previous limit of 15 percent.

　　"We welcome foreign banks to make equity investmentssintosdomestic lenders, which can help Chinese banks improve their corporate governance," said Liu.

　　To date, 84 of the 191 banking outlets set up by foreign lenders in China's mainland have been permitted to conduct renminbi banking services to non-mainland clients.

　　"We welcome the broader relaxation for foreign banks' businesses in China," said Zhang Dandan, a spokeswoman for the Hongkong and Shanghai Banking Corp China. "We are studying the details."

　　The hsbc has already applied to the CBRC for permission to offer local currency services to Chinese enterprises at its branches in Shenzhen, Shanghai, Guangzhou, Qingdao and Tianjin, according to Zhang.

　　Standard chartered Bank China said it plans to apply for licenses to offer local currency services in Shanghai, Shenzhen and Beijing. While Beijing isn't on the list of approved cities, the bank wants to apply now so it can offer the business as soon as regulations are relaxed in the capital.

　　"We have already made enough preparations for the launch of the new service to Chinese companies as China's commitment to the WTO has promised to open the sector at this time," said Crystal Qian, the bank's director of external affairs.

　　While negotiating to join the WTO, China agreed to allow overseas banks to offer renminbi banking services to domestic enterprises within two years of joining the global trade organization on December 11, 2001.

　　"The beneficiaries will be Chinese corporate clients which can have more choices in selecting a bank," said Liu.Industry officials said the foreign banks still have to increase their brand awareness among domestic companies.

　　"It is still unclear what kinds of policies foreign banks will provide to us, and we need time to get familiar with them," said Xiang Zhen, vice president of Shanghai Best Land Properties Ltd.While overseas banks have been limited in who they can offer renminbi services to, they have still managed to make a tidy profit from the market.

　　The 84 foreign bank branches allowed to offer renminbi services saw their profits grow 37 percent during the first 10 months of this year, according to the CBRC chairman.