After more than five years of working on a FinTech project with Chinese eCommerce marketplace JD.com, commercial lender China Merchants Bank (CMB) has decided not to move forward with the planned direct banking joint venture.
CMB’s board gave no reason for its decision to withdraw an application that would have led to the opening of CMB’s Tuopu Bank with JD, also known as Jingdong Digits Technology Holding, Yicai Global.com reported on Monday (July 25).
The end of the project has no bearing on CMB’s operations, an unnamed bank executive told the news outlet.
Citic aiBank, a JV between Citic Bank and tech giant Baidu, and PSBC Ubank, which was launched by Postal Savings Bank of China, are the only two direct banking entities with independent legal status in mainland China, according to Yicai Global.com.
CMB first planned in February 2017 to establish a wholly owned direct banking entity with independent legal status and registered capital of CNY2 billion ($296 million), according to the article. The plan was to set aside as much as 30 percent that could be available for future investors.
“In December 2020, regulators approved preparatory work on the joint venture, with Jingdong Digits’ unit Wangyin Online Beijing Business Service holding the minority stake,” according to Yicai Global.com.
“China Merchants Tuopu Bank would give full play to the partners’ advantages to improve client acquisition, risk control, and operational capabilities, and to provide users with more efficient, cheaper, and better quality financial services with the support of technologies and talent, CMB said in an article published soon after it received regulatory approval to set up the JV,” per the news outlet.