The banks, all with qualified domestic institutional investor (QDII) status, include major Chinese commercial and foreign-funded banks such as Citibank and the Bank of East Asia, which were approved last year to transform their Chinese branches into locally incorporated banks registered on the Chinese mainland.

Fifteen insurance companies were also granted overseas investment quotas of USD 5.17 billion and one fund management company was given a quota of USD 500 million, the state media reported today.

China started the QDII programme in July 2006, allowing QDIIs to raise Renminbi (Chinese currency) funds from domestic institutions and individuals and convert them into foreign currency for overseas investment.

China has also eased control on foreign exchange purchases by individuals. It put an annual quota on foreign exchange purchases by individuals in May 2006, rather than limiting the size of each purchase.

Purchases soared 220 per cent year on year during the last seven months of the year.

The annual quota for individuals was raised from USD 20,000 to USD 50,000 on February 1 this year by the State Administration of Foreign Exchange (SAFE).