China is considering lifting a decade-long ban on commercial banks' investment in financial leasing companies, the China Securities Journal reported Thursday.

The China Banking Regulatory Commission (CBRC) may revise a regulation to allow China-registered lenders with no less than 80 billion yuan (10 billion U.S. dollars) of assets in the previous year to hold more than 50 percent of a financial leasing company's shares, the newspaper quoted an unidentified source with the CBRC as saying.

Under the revised regulation, financial institutions approved by the CBRC as well as large manufacturers and leasing companies can also take a majority stake, but only banks have the right to initiate the establishment of a new financial leasing company, according to the report.

A major financing facility apart from credit and securities, financial leasing provides enterprises with access to equipment when they are short of capital.

Under financial leasing contracts, leasing companies use bank loans to buy equipment required by enterprises, who can then use the equipment for an agreed period in return for paying a rental.

The move shows the government's determination to facilitate financing by promoting integrated operations of financial business- a departure from previous approaches, according to the report.

The government ordered all commercial banks to withdraw investment from financial leasing companies in 1997, deeming it necessary to separate different types of financial business for easier supervision.

In developed countries, financial leasing is mostly conducted by companies with a banking background.

"The absence of bank investors has hampered China's development of financial leasing," said Guo Shuyan, vice chairman of the Financial and Economic Affairs Committee of the National People's Congress.

Financial leasing accounts for only 2 percent of the nation's total investment in industrial equipment, much less than the world average of 17 percent and the United States' 33 percent, according to the 21st Century Business Herald.

"We'll set up a financial leasing company as soon as the revised regulation is issued," an unidentified source with China's first private bank Minsheng Bank told China Securities Journal.

The revised version is expected to take effect this year after being examined by the country's legislature, said Li Jianhua, a CBRC official in charge of non-bank financial institutions.

The new version also says financial leasing companies must concentrate on their main business and are forbidden to invest in stock markets, take deposits with high interest rates or conduct other unlawful business, according to the China Securities Journal.

There are 42 foreign-funded financial leasing companies operating in China, and they had brought in 8.2 billion U.S. dollars of foreign capital by last July, said the overseas edition of People's Daily.

In addition to 12 financial leasing companies directly under the CBRC, there are a further 20 Chinese-funded ones in China, said the 21st Century Business Herald.