Three commercial banks were approved in Beijing Wednesday to set up fund management companies through direct investment, an unprecedented move China in Chinese banking reform.

The approved banks are the Industrial and Commercial Bank of China, China Construction Bank and the Bank of Communications, according to a press release from the People's Bank of China (PBC).

The decision jointly made by the PBC, China's banking and securities regulatory commissions has got the green light from the State Council.

A joint meeting was held here Wednesday, where all three finance authorities have agreed to strengthen their supervision and guidance of the three banks to help the fund management companies establish themselves smoothly and function well.

The meeting set the end of September as a possible deadline for application and approval procedures.

It is too early to tell which bank will set up China's first fund management company. China's finance authorities promised to track and evaluate their preparation.

Sources from the People's Bank of China said the decision was made in line with the development of China's financial industry. If the three banks succeed in running their fund management business, more other banks will be allowed to follow suit, they said.

Source: Xinhua