Financial holding companies in China are required to have at least 5 billion yuan (US$731.74 million) in capital, according to a recent Reuters report.
The regulation was announced on Monday by the People’s Bank of China, as a move to prevent systematic risks to the vast financial sector.
The new rules were aimed to stem loopholes in supervision and regulation systems, as a small number of companies expanded blindly into the financial sector without isolation mechanisms and while accumulating risks, the central bank said in a statement.
The central bank also requires to have at least 500 billion yuan in total assets, and those that do not hold banking assets should have at least 100 billion yuan in assets.
The regulation will take effect on November 1, 2020 and companies have a one year of grace period to comply with the rules.