Agricultural Bank of China has set up a new asset management unit to develop wealth management products and manage their investments, according to a National Business Daily report.
Till date, nearly 10 listed banks have set up or will soon form their own asset management departments.
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Earlier, Shang Fulin, chairman of the China Banking Regulatory Commission, has asked the commercial banks to establish special units to handle wealth management products calculate costs and control risks.
Fulin added that that the lack of standardization of wealth management services has resulted in idle funds, raised financing costs and increased the risk of maturity mismatch and low liquidity.
Recently, China’s regulators have tightened rules on wealth management products saying that an individual account should be maintained for each wealth product. In addition, banks will also require to link wealth management products with the assets that proceeds are invested in.
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