BNP Paribas China said on Monday the bank has received approval to underwrite yuan-dominated bonds, becoming the third foreign bank to receive the license in China.

Following HSBC and Standard Chartered, BNP Paribas will be allowed to act as a lead underwriter on panda bonds issued by foreign corporate issuers in China with the type B license, as China looks to open the door wider to foreign investors, according to the announcement by China's National Association of Financial Market Institutional Investors on Friday.

Prior to this, the bank was only allowed to act as an advisor and syndicate member for non-financial corporate panda bonds.

The announcement was made at the same time as the sixth China-France High-Level Economic and Financial Dialogue was held in France.

The bank submitted applications around two months ago, and the regulator has chosen the proper timing to make the announcement, according to people familiar with the matter.

CG Lai, BNP Paribas China's deputy CEO, said with the growing maturity of multinational corporations' onshore operations in China, foreign parent companies are increasingly seeking to tap the domestic bond market, as an important and highly cost-effective source of yuan funding to support their Chinese expansion needs.

"With this license, BNP Paribas China can help international issuers to tap the world's largest yuan liquidity market for their offshore projects, which is key to promoting the yuan's internationalization," he said.

George Sun, the bank's head of global markets－China, said: "The move will help to widen the issuer pool beyond Chinese issuers, as well as to increase inbound foreign investment. We see this as a significant step forward in China's financial market liberalization."

As of Monday, foreign entities have issued panda bonds worth more than 900 billion yuan ($130 billion) on the interbank market, according to data from Wind Info.

Top Chinese financial regulators have sped up efforts to facilitate the opening-up of the domestic bond market. Earlier this year, the People's Bank of China and the China Securities Regulatory Commission jointly issued an announcement to promote the unified supervision of granting approval for rating business in the inter-bank bond market, with more measures to simplify rules in order to boost the overall market appetite.