Date
20 August 2017

Will a new coal bank emerge from the shadows?

Amid the slew of entities seeking private bank licenses in China, one is said to be an industry group that proposes to establish an institution named Mei Tan Bank, which means coal bank in Chinese.

While speculation abounds regarding the mystery group, right now one cannot say with any great certainty whether there has indeed been such application or if the entire talk is mere conjecture. Although the Shanxi provincial government is reported to have said earlier that preparations are underway to set up a new lender, a reporter from Innovative Finance Observation Journal failed to get a confirmation from local authorities.

The only evidence so far that the Mei Tan Bank is being mapped out is a notice posted on a website –www.kvp8.com — of Hong Kong-based Jinben Investment Group, which claims to be leading the initiative.

As for the shareholding structure, Jinben said Mei Tan Bank has been co-founded by over 100 key coal companies in the country including top names such as Shenhua Group, Datong Coal Mine Group and Jincheng Anthracite Mining Group. But the coal miners themselves have been evasive when asked whether they have indeed participated in the setting up of what would be the country’s first ever privately-run coal bank.

On top of that, Mei Tan Bank’s purported business model and product offering appear somewhat too good to be true.

Despite the ambiguity over the composition of the proposed lender, Jinben has lost no time in trying to reveal the blueprint for the business.

Mei Tan Bank will focus on serving the coal sector. Jinben told mainland media that the lender aims to attract deposits with a minimum size of 500,000 yuan (US$82,062).

Deposits rates would be better than those offered by state-owned banks. Secured by coal inventory, depositors will get a bonus return if the price of coal at the time of maturity exceeds the level when the deposit contract was made. At the same time, Jinben said Mei Tan Bank can offer more competitive loan rates as well, presumably targeted at cash-strapped miners.

The websites of Mei Tan Bank and Jinben are both frequently under attack by hackers, who repeatedly warn the coal bosses not to straddle across the line.

The opposition to Mei Tan Bank is not surprising, Jinben said, suggesting that vested interests are trying to nix the new lender due to fears that it could take business away from existing local banks due to strong linkages with the coal industry.

– Contact the writer at [email protected]

RC

 

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