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HSBC has got the nod from China's banking regulator to set up a village bank in the central province of Hubei, becoming the first foreign bank to expand its business in the country's vast rural areas, HSBC announced on Thursday.
The village bank will be opened in Zengdu District with a population of 2 million in Suizhou of Hubei Province at the end of 2007 and is expected to employ 25 people.

"The new bank will provide financial service tailored to rural communities and local enterprises," said Vincent Cheng, chairman of the HSBC Bank (China) Company Ltd.

Chinese farmers and rural enterprises currently have few places to get funds for their businesses. Official figures show Chinese farmers rarely obtain loans of more than 5,000 yuan.

On Monday, the China Banking Regulatory Commission (CBRC) vowed to help more banking institutions to extend service in the rural areas as a way to upgrade the country's under-developed rura