Alibaba passes final hurdle in moves to open private bank

Ant Financial Group, which is affiliated with Alibaba, will own 30% of MYbank, alongside Shanghai Fosun Industrial Technology Development with 25%, a subsidiary of Wanxiang Group  with 18% and Ningbo Jinrun Asset Management which will own 16%, Caixin Online said.

The bank will "not have any physical outlets, or cash services, or engage in any offline businesses such as issuing checks and bills of exchange like traditional banks do", the source said.

China's central bank requires that anyone opening a bank account must go to a branch to prove their identity, a major obstacle to opening an internet-only bank in the country. 

China News reported in May that the central bank plans to change this policy, but until this is resolved, MYbank will need to pair up with other banks, Caixin's source said.

MYbank is the last of five private banks that the regulator said last year could open for business, Caixin Online said.

WEbank, another online only bank, opened in China in January.

These banks will face competition from Alibaba's Alipay system, technology law expert Paul Haswell of Pinsent Masons, the law firm behind Out-Law.com, said when WEbank launched.

Alipay has been operating as a de facto online bank, Haswell said. Although it is actually “an advanced payment service” similar to PayPal, many customers have been using the service “as if it is a private bank”, Haswell said.

Alibaba has also been offering credit services to buyers in the UK and the US through partnerships with lending companies.