CHINA'S mainland and Taiwan yesterday agreed to further ease investment caps in each other's financial institutions, officials said.

Individual Chinese mainland banks will be permitted to acquire up to 10 percent of a bank listed in Taiwan, up from 5 percent, according to a statement released by the island's banking regulator Financial Supervisory Commission.

Total mainland shareholding may go up to 15 percent after a 5 percent ownership cap for investors under the Qualified Domestic Institutional Investors scheme is included.

Taiwan banks, meanwhile, will be allowed to expand their business into rural areas of the mainland, it said, without specifying when the new rules would go into effect.

The statement described the agreement, reached during a closed-door meeting in Taipei by officials from the commission and the China Banking Regulatory Commission, as "win-win."

"This would help the operation of Taiwan banks in the mainland and facilitate investments in Taiwan by mainland banks and enterprises," the statement said.

The easing comes more than a year after the island authorities removed a prohibition put in place in 1949.

In 2009, the two sides signed a package of pacts on better cooperation in banking, insurance and securities.

Currently six Taiwan banks have branches on the mainland while four others have opened liaison offices. Two mainland banks have set up branches in Taipei while two others have opened representative offices.