HSBC Holding Plc. has became the first international bank to establish a bank in rural China in a pilot programme approved by the China Banking Regulatory Commission.

HSBC Rural Bank Co., a wholly owned entity, will be located in central China's Hubei province, Europe's biggest bank said in a statement.

"We appreciate the opportunity to further extend HSBC's presence in China and capitalise on the new opportunities in the country's under-banked rural market," said Stephen Green, group chairman of HSBC.

HSBC has rural banking operations in Brazil, India, Indonesia, the Philippines and Mexico.

HSBC Rural Bank, which will be based in the Cengdu County of Suizhou City, will initially have 25 staff and is expected to be set up by the end of the year.