China's postal savings bank is to open by the end of this year, said Cai Esheng, vice-chairman of the China Banking Regulatory Commission (CBRC).

The postal savings bank will take over the savings business of China Post, which is to be restructured into a postal service group.

"China Post has offered savings service for two decades, but it has no lending and credit card business. It is now crucial for the savings branch to be transformed into a full bank," said Cai on Tuesday at a forum here.

The postal savings bank will become the country's fifth largest bank after the "big four" state-owned commercial banks -- the Industrial and Commercial Bank of China, the Bank of China, the China Construction Bank and the Agricultural Bank of China.

Analysts say the establishment of the bank will improve financial services in rural areas by expanding financing channels.

China Post has a massive network of 36,000 post offices across the country with about 70 percent in rural areas, each with a savings service section.

CBRC chairman Liu Mingkang said the postal savings bank should play the role of a commercial bank so that funds absorbed can be channeled to rural areas to fuel economic development.

The Chinese banking industry watchdog said the postal savings bank should mainly cater to residents in urban and rural communities with retail banking and intermediary services.

According to CBRC figures, the postal savings arm of China Post had deposits of 1,516 billion yuan (189.5 billion U.S. dollars) by the end of July, ranking the sixth after the big four banks and the Rural Credit Cooperatives.

Cai said the postal savings bank will become a joint-stock bank and go public in the future.

Source: Xinhua