BEIJING - China will set up three to five fully private banks on a trial basis this year in a bid to further open up the banking sector to domestic and foreign capital, China's banking regulator said Monday.

Private capital will be introduced to restructure current banking institutions or set up new ones bearing their own risks, the China Banking Regulatory Commission (CBRC) said in a work meeting.

Strict procedures and standards will be set for the pilots, with demanding set-up criteria, limited licenses, enhanced supervision and a risk handling system, according to the CBRC.

The CBRC will try to relax the threshold for foreign capital to enter China's banking sector and ease Renminbi operation requirements, while more policies will be issued to support banking reform in the Shanghai free trade zone and financial reform pilot zone.