China's First Private Bank Opens With Premier Li

Reform rolls on.
Private bank makes first loan

Premier Li Keqiang pressed the ‘enter’ button on a computer on Jan 4 to finalize the first loan by WeBank, a new online bank and one of five privately funded banks given approval to open in China.

During a visit to China’s first Internet-based bank, Li said he placed high hopes on online competition in the banking sector to cut costs and force State-owned financial giants to change outdated business models.

“Internet-based banking is a significant step in China’s financial reform,” Li said, stressing that the government will provide a good environment for the development of private and online banks.

The loan approved by Li during the bank’s soft launch was for 35,000 yuan ($5,600) to Xu Jun, a truck driver in Shenzhen. According to their agreement, Xu will repay the principal and interest, an annual rate of 7.5 percent, in six months.