According to the latest report from Reuters, Chinese electronics company Xiaomi is getting ready to start banking services in China. According to an official statement from the company, the shareholders and regulators had approved the name Sichuan XW Bank for the lender and it will be publicly available very soon.
A number of other Chinese tech companies are already operating online banks in the country. In 2015, WeBank, backed by Tencent Holdings, started China’s first functioning online bank. After that, Alibaba group launched an online bank called “MYBank.”
Xiaomi has decided to introduce an online bank after the sale of its smartphones has started decreasing in China. Xiaomi was valued at $46 billion in its last fund-raising in 2014. It is now working hard to make a good revenue from its smart home devices and software services.
Recently, Xiaomi CEO and Chairman Lei Jun posted the information of the rebranding and a picture of the new bank’s logo on the social media website Weibo. Xiaomi has not confirmed the launch date of the online bank.
Most of the banks in China are owned by the state and mainly assist the state enterprises, making financing hard for small companies. The government tried to solve the problem by releasing batches of private banking licenses, starting two years ago. The latest batch by the China Banking Regulatory Commission includes new banks in China’s northeast industrial rust belt.
Xiaomi’s secondary company holds just under 30 percent of the venture, while Chengdu Hongqi Chain and New Hope Group own 15 and 30 percent, respectively. The bank has a recorded capital of 3 billion yuan ($431.38 million).