CHINA Merchants Bank has been granted a regulatory license to run its New York branch and plans to start operations there this year, the bank said yesterday.

Merchants Bank became the first Chinese bank to receive a banking license in the United States since the adoption of the Foreign Bank Supervision Enhancement Act of 1991.

Merchants Bank, the sixth biggest bank in China, was given the official banking license by New York State's Superintendent of Banking Richard H. Neiman on Monday, the Shenzhen-based bank said.

Merchants Bank set up a representative office in New York in 2002 and applied to establish a branch last year.

Merchants Bank was given regulatory approvals from the New York State Banking Department and the Federal Reserve Board of Governors late last year.

"The New York branch will facilitate trade and other business activities between the United States and China by providing trade services, trade finance, dollar clearance and other services to businesses from both countries," said Fang Hui, the New York branch president of Merchants Bank, according to an official press release dispatched by Business Wire.

Bank of China and Bank of Communications now have branches in the US, which were approved in the 1980s.

Beijing-based China Minsheng Banking Corp bought stakes of UCBH to strengthen its standing in the US.

UCBH's 70 outlets in the east and west coast of the US and its sound base in the Chinese community in the states will help boost Minsheng's business.

Industrial and Commercial Bank of China and China Construction Bank have also applied to open branches in the US. Both are still waiting for the go-ahead from the US regulators.