(Yicai  Global) Feb. 18 -- China's banking regulator has given the go-ahead for  the Industrial and Commercial Bank of China to form its own wealth  management subsidiary. 

All five of  China's largest commercial lenders have now received the green light to  set up these units, according to a statement from the China Banking and  Insurance Regulatory Commission, adding that other domestic banks are  also looking to enter the sector.

The  Beijing-based lender will invest its own funds of up to CNY16 billion  (USD2.4 billion) to set up the subsidiary, according to a statement last  November. The investment will make it the largest wealth management  unit among the big five banks in terms of registered capital.

The approval  will help to expand the bank's team of institutional investors while  providing more funds for the real economy and financial markets, and  better meeting diversified financial needs, the CBIRC said. 

Financial  regulators have been releasing new rules for the wealth management  sector since the second half of last year including initiatives to  encourage commercial lenders to establish the subsidiaries. This move  will help them to run such units independently and prevent risks in the  sector from affecting other parts of the banks' operations.