Small and Micro Financial Services Company (SMFSC), parent company of Alipay and financial arm of Alibaba Group, has been given official approval by the China Banking Regulatory Commission to set up a private bank.

The bank is named “Zhejiang Online Commercial Bank” (not official translation), with SMFSC owning a 30% stake and the other three shareholders holding the remainder.

It will be an Internet-based commercial bank and the target customers are end-users and small-and-micro businesses on e-commerce platforms. The bank won’t receive a deposit more than RMB200, 000 (about US$33,000) or make a loan more than RMB5 million (less than US$1mn), according to SMFSC.

The bank will create online-only, easy-to-use financial products and services. Also it will introduce products or services from existing banks and financial institutes as the company’s ultimate goal is to build a platform for online financial products or services, SMFSC says.

The Chinese banking regulator requires the bank to be established within six months. If a delay is necessary it shouldn’t be longer than three months.

SMFSC, also known as Zhejiang Ant Small and Micro Financial Services Group Co., Ltd, has made small loans to retailers on Alibaba’s marketplaces since 2010. There had had 342,000 SME borrowers with it as of 2013, according to Alibaba’s IPO filing.

Tencent and Alibaba’s SMFSC were the only two Internet companies, out of ten, allowed by the regulator to apply for the license for private banks earlier this year. Tencent and its two partners have registered WeBank, where the Chinese social giant has a 30% stake.