The group, which also included Britain's Standard Chartered and Hong Kong's Bank of East Asia, began operations after passing an audit by local regulators last week, the China Daily reported.

While the four banks will now in principle have access to the country's two trillion dollars of domestic household savings, the lenders are likely to mainly target China's wealthier customers, the newspaper said.

At the same time, domestic lenders, trying to fend off competition in the retail market, are also stepping up their efforts to court higher-end customers with services such as private banking, it said.

Beijing agreed to open up the tightly held industry when it became a World Trade Organization member in 2001.