The China Postal Savings Bank (CPSB) was inaugurated on Tuesday morning, settling itself as the country's fifth largest bank.

Approved last December following a review by the China Banking Regulatory Commission (CBRC), the new institution will tailor its services to retailing and intermediary businesses, while setting basic financial services nationwide.

The Shanghai Securities News reported that its registration was completed by March 6, with assets totaling 20 billion yuan (US$2.6 billion).

Headquartered in Beijing, the new bank will begin opening branches and sub-branches throughout 2007, the sources said.

Liu Andong, CPSB Chairman, spoke at the inauguration, saying this marked a substantial step in China's financial reform.

"(The establishment of the bank) will enhance the development of China's banking sector as well as the vast rural areas," he said.

Analysts have welcomed the new player on China's financial scene, saying it will offer improved financial services in rural areas by bringing with it new opportunities and financing channels. 

By the end of 2006, postal savings in China amounted to 1.6 trillion yuan, the highest after those seen in the "big four" state-owned commercial banks -- the Industrial and the Commercial Bank of China, the Bank of China, the China Construction Bank and the Agricultural Bank of China.

China has 36,000 outlets post offices nationwide, almost 60 percent of them in rural areas, and 270 million account holders.

China's rural financial market is underdeveloped, according to the State Bureau of Statistics. As the government labors to build a "new socialist countryside", it works to improve agricultural production, living conditions and public administration for China's 800 million rural denizens.

Estimates have placed at 15 trillion yuan (US$1.92 trillion) the funds needed to complete China's new countryside construction by 2020, most of which would emanate from financial institutions, but severe gaps in the rural financial network will have to be filled if they are to meet this demand.

(Xinhua News Agency March 20, 2007)