Baidu and CITIC’s direct bank officially opens

China’s first independent direct bank began operating officially on Saturday, co-owners Baidu, the search giant, announced in a news release.

CITIC aiBank Corp Ltd (or Baixin Bank in Mandarin) was

founded jointly by Baidu and China Citic Bank Corp.

Direct banks operate without any tangible branch network, offering services remotely via online and telephone banking.

Baidu said CITIC aiBank is the first of its kind in China that is an independent legal entity with its own license, instead of being a branch of banks as is the case with entities set up by Baidu’s rivals, Alibaba’s MyBank and Tencent’s WeBank.

CITIC aiBank is a positive attempt by commercial banks to adjust into market needs in the Internet era, Cao Yu, vice chairman of the China Banking Regulatory Commission, said at a news conference in Beijing on Saturday.

It’s main business is small-volume but frequently-used services, such as payments and loan and wealth management, according to the official website of the bank.

The bank will focus on services for individuals, small and micro-sized enterprises and

the agriculture industry, Li Qingping, president of the bank, told journalists, noting the bank offers a "long-term free-funds transferring service" for individual customers.

China’s internet companies have shaken up the banking sector in recent years with mobile payments, wealth management and peer-to-peer lending.

Under the pressure of losing consumers to internet giants, China’s banks chose to compete with the new entrants.

Regulators have encouraged private banks under a pilot program in the hope that they can help channel finance to small and private companies.

In 2015, China established five private rather than state-owned banks, including Alibaba's and Tencent's projects.

(CGTN)