Christmas has come early for the banking fraternity. Having already allowed foreign banks to pick up minority stakes in their listed Chinese counterparts, Beijing is now allowing them to offer a full range of services on mainland soil.

The new rules, promised under World Trade Organisation agreements and due to take effect on December 11, contain less onerous capital requirements than some had feared. In order to incorporate locally – a pre-requisite for offering full services to domestic customers – banks will have to put up registered capital of Rmb1bn ($127m) and operating capital of Rmb100m for each branch.

That, however, is the easy bit. Being locally incorporated means local regulation, and a whole new layer of administration. Back- and middle-office functions can no longer be outsourced, or sent back to head office; instead, the Chinese operation will require its own compliance department, internal auditors and computer systems. There could also be tax implications, since there will be a transfer of title on loans. These issues, not to mention the difficulty of procuring sufficiently skilled staff, suggest local incorporation could still be a challenge
More pertinently, for the bulk of the 70-odd banks operating in China it may not even be logical. Many of these lenders simply followed their clients, initially offering trade finance and treasury services to multinationals. The chances of breaking into China's retail market are paper-thin unless you are HSBC or Citigroup, the two biggest players. Citigroup's newly-acquired controlling stake in Guangdong Development Bank, with more than 500 branches, gives it a fair shot. Elsewhere, however, banks are likely to concentrate on key products, like credit cards, or use their international clout to woo private enterprises – and, as important, provide wealth management for the tycoons behind them.

Nevertheless, the prospect of all these renminbi dropping into their hands suggests that, for all the headaches, there will still be banks queuing up to incorporate