The People's Bank of China File Photo:Xinhua

The People's Bank of China (PBC), the country's central bank, issued new rules on the supervision of financial holding companies on Sunday, in a bid to effectively prevent financial risks and better serve the real economy.

A financial holding company is a type of bank holding company that offers a range of non-banking financial services, such as insurance underwriting and investment advisory services.

The new rules, to take effective on November 1, clarify the central bank's supervision responsibility and set entry thresholds for financial holding companies' capital, practices and risk parameters.

According to the document posted on the PBC website, companies with two types of financial business, such as banking, insurance and asset management, have to apply for a financial holding company license, with registered capital of more than 5 billion yuan ($732 million). They need to file application within 12 months of the new rules taking effect.

The rules came as China has seen a rapid development of financial holding companies in recent years, amid diversified demand for financial services of enterprises and consumers and to help serve the real economy. Some of these companies, formed with investment from non-financial enterprises, have made blind expansions that fall into regulatory gaps and created mounting risks, according to media report.