SHANGHAI (AFP) — China plans to extend the period that foreign investors must hold their stakes in local banks, following anger over recent quick sales, state media said Wednesday.
China Banking Regulatory Commission chairman Liu Mingkang said the lockup period for new foreign strategic investors must be increased to at least five years, the Shanghai Securities News reported. It said the current period is three years.
No details were given as to when the new regulation would be implemented.
A number of foreign institutions bought into domestic banks as strategic investors years ago, but recently offloaded their holdings to shore up their capital amid the global financial crisis.
In the past four months alone, Bank of America sold part of its stake in China Construction Bank, while Royal Bank of Scotland Group and UBS both sold their entire stakes in Bank of China.
The sales inflamed domestic anger that foreign investors were given unfair preferences in obtaining stakes in state-owned banks as they were prepared for listings.
The foreign banks were accused of taking quick profits by selling the holdings after the institutions listed.