Tencent Holdings Opens China’s First Private and 100% Online Bank
Tencent Holdings Opens China’s First Private and 100% Online Bank
Chinese Internet holding company Tencent has launched the first private bank in China named WeBank. In another first, this bank is an entirely online operation. With this, China has moved to a new era in online banking.
WeBank To Compete With State Run Banks
Named WeBank, this Internet bank officially started operating on Monday, 5th January 2015 in a ceremony attended by Premier Li Keqiang. This is also the first bank which is not entirely controlled by the government in China. It does not have a brick and mortar establishment meaning customers can carry out their banking online, from depositing funds to their transfer as well as securing the loan.
First Loan of 35,000 Yuan Granted
According to the government of China, Premier Li was the first to give the approval for a loan via WeBank, giving a total of 35,000 yuan which is around USD 5600 to a truck driver. Tencent is directly competing with government run banks for a share of the customer’s services.
About Tencent
Tencent is a major company in China providing a wide and massive range of services such as its own social network, China’s answer to Facebook, an instant messaging platform known as QQ and the mobile app named WeChat. The firm also is an owner of an e-commerce company and is a massive player in the online gaming sector as well. Banking has now been added to the mix. The charter for private banks enabled WeBank to focus on small businesses and individuals and not large corporations.
Private online banks such as WeBank can issue small loans besides performance of standard banking tasks. Major banks in China which are state run have controlled the marketplace so far. But this is set to change with the emergence of Tencent’s WeBank. Tencent owns subsidiaries which provide mass media, entertainment, Internet and cell phone value added services as well as online advertising in China.
Tencent Holdings is the fifth largest Internet firm across the globe following Google, Amazon, Alibaba as well as Ebay on October 2014. Tencent has also released a popular messaging app called WeChat followed by its close kin, WeBank.
Tencent One of 10 Institutions Granted Banking License
The regulatory body of China has in the previous year granted licenses to 10 such institutions. This initiative is focused on financing credit to small borrowers who are not able to get a loan from the bigger state owned banks. the Chinese premier said at the launch ceremony of WeBank that “We will lower costs for and deliver practical benefits to small clients, while forcing traditional financial institutions to accelerate reforms. It’s one small step for WeBank, one giant step for financial reform.”
About WeBank
30% of WeBank is owned by Tencent and investment firms Baiyeyuan Investment and Liye Group own 20 percent. The remaining 30% is made up of 7 shareholders and the entity as a whole has registered capital of RMB 3 million or USD 482 million.
