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JD reported to plan for banking license

By Fan Feifei | China Daily | Updated: 2017-02-04 09:30

JD reported to plan for banking license

View of the stand of JD Finance of Chinese online retailer during an exhibition in Shanghai, Nov 4, 2016. [Photo/IC] Inc, China's second-biggest e-commerce player, said on Friday it is carrying out work related to financial service licenses, after media reports said the internet giant is willing to cooperate with a domestic traditional bank to open a direct bank, engaging in direct banking business as a separate legal entity.

A direct bank is a bank without any branch network that offers its services remotely via online banking and telephone banking and may also provide access via ATMs (often through interbank network alliances), mail and mobile.

JD on Friday declined to comment on the reports and would not disclose details.

It is not the first time that internet companies have engaged in direct online banking in China. In January, internet search provider Baidu Inc and China CITIC Bank announced they had received approval from the China Banking Regulatory Commission in relation to the establishment of Baixin Bank, an online direct bank both companies had invested in.

CITIC will hold a 70 percent stake in Baixin and Baidu will have a 30 percent share.

In 2015, Alibaba Group Holding Ltd's financial arm, Ant Financial Services Group, launched an online private bank called MYbank, which focuses on providing financial services to small and micro businesses and young entrepreneurs.

Internet giant Tencent Holdings Ltd also launched an online bank called WeBank.

Dong Ximiao, executive president of the Hengfeng Bank Institute, said most of the domestic direct banks exist as an internal department of a bank, some even as a secondary unit affiliated to the e-banking department or personal finance department.

However, a direct bank should be a separate legal entity according to international practice, Dong said.

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