The Royal Bank of Scotland PLC has applied for a securities license as it looks to rearrange its operations in mainland China.

The license would allow RBS to underwrite mainland Chinese share issues and even trade local stocks. The bank formed a joint venture with a domestic partner and has applied for regulatory approval.

Other banks such as JP Morgan and Barclays are also trying to obtain a license for trading on mainland China however only a few have the persmission received so far.

The intent to get an approval by RBS shows that it is ready to invest in global stocks after it was bailed out by the UK government in 2008. Banking regulators are asking the bank to sell its overseas assets.

If RBS is able to receive a license it can prove helpful to many UK companies who are running low on liquidity as well as the government who can tap into the funds in the Chinese economy.

RBS did not comment on the proposed joint venture but suggested that it is planning to expand in China. RBS acquired a 5 per cent stake in Bank of China and entered into deals to facilitate services relating to credit cards and wealth management, however it decided to sell the stake last year for $2.4bn to boost its balance sheet.

Now it has signed a new memorandum of understanding covering global wholesale and investment banking deals in accordance with its new focus in the region. RBS has sold its retail and commercial banking operations in the Asia pacific region to Australia & New Zealand Banking Group and it is also waiting for approvals to sell stakes in other countries including China, India and Malaysia.

RBS's involvement in China other than the agreement with the Bank of China includes a leasing operation, stakes in domestic trust and futures companies along with the ownership of a mainland banking license.

The bank has a 20 per cent stake in Suzhou Trust and 16.8 per cent stake in a subsidiary of Galaxy Securities yet to be found.