China's banking regulator will make active efforts to set up a national postal savings bank this year, based on the existing savings deposit business at far-flung postal stations, a senior banking official said.

Cai Esheng, Vice-Chairman of the China Banking Regulatory Commission (CBRC), made the remarks at a recent meeting on banking supervision, giving a clear answer to a proposal by the central bank.

He said the regulator will actively support the development of infrastructure of the postal savings network and guard against operation risks.

Postal savings services were kicked off in 1986 with the establishment of the China Post Savings and Remittance Bureau. By the end of 2005, CPSRB had a deposit balance of 1.3 trillion yuan (about 162 billion U.S. dollars), making it the fifth biggest savings institution just after the "Big Four" state banks.

CPSRB takes deposits from the public, which, however, can only flow to the central bank. Interest rate income from that has been CPSRB's major source of profits amid the dwindling of its traditional services.

China's State Council finally approved the establishment of a postal savings bank in July 2005, when it decided the national postal system will be split into three parts: a post regulatory body, a postal service company and a postal savings bank.

Cai also called for research into the advantages of a rural postal savings network, which could contribute more to the "new socialist countryside," a concept the Chinese government has raised amid efforts to boost rural development.

Source: Xinhua