The Chinese government hopes to have 1,027 rural banks established by 2011. The majority of the 118 rural banks set up since 2006 had become profitable by June 30, according to the China Banking Regulatory Commission (CBRC). The country used to depend on rural credit cooperatives to provide financial services in rural areas. The cooperatives were financial organizations with farmers being shareholders, buy many collapsed in the 1990s. The government has been trying to reform the system by restructuring the cooperatives into rural commercial banks. Since 2006 the government is encouraging private capital and foreign investors to set up rural banks, micro credit companies and rural mutual funds. HSBC opened its first rural bank in Hubei in December 2007 and now owns nine rural lenders, making it the biggest foreign player in the sector. Standard Chartered has one rural bank in Inner Mongolia. Bank of East Asia (BEA) has applied to set up a rural bank in Shaanxi province. Foreign investors are also teaming up with Chinese banks to set up a rural presence. Spain-based Banco Santander Central Hispano and China Construction Bank (CCB) will set up a holding company under which 100 rural lenders will be established in three years. Bank of China (BOC) and Temasek Holdings may invest as much as CNY20 billion to build a rural banking business. The companies are in talks about setting up as many as 400 rural banks, the South China Morning Post reports.