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The shareholding reform of China's state-owned commercial banks will also involve qualified strategic investors at home, a senior official with the country's banking watchdog said here Thursday.

"Apart from overseas investors, we will also invite qualified domestic strategic investors as partners," said Tang Shuangning, vice chairman of China Banking Regulatory Commission (CBRC), during an interview with the news website xinhuanet.com on the sidelines of the ongoing annual parliamentary session.

So far all strategic investors involved in the shareholding reform of China's state-owned commercial banks are from overseas.

While seeking and engaging strategic investors, the state-owned commercial banks will adhere to five basic principles, the most important of which is to "keep a controlling share in the state's hands," and apply five basic criteria on the applicants, one of which is that the investment from the strategic investor must account for no less than 5 percent of the total shares, said Tang.

"It is up to the banks themselves to decide on negotiation candidates and terms of cooperation," he added.

Tang also dismissed some people's worries that the state-owned banks would be "sold cheaply" during the shareholding reform process, and that the holding of Chinese bank shares by foreign banks might threaten China's financial security.

"The purpose of engaging strategic investors in the shareholding reform is not to collect funds to raise the capital adequacy ratio of the state-owned commercial banks, but to learn the expertise of our foreign counterparts in service, management and internal control to improve the competitiveness of China's banking sector," Tang explained.

The CBRC will be closely watching the performance of the existing strategic investors of state-owned commercial banks, particularly their shareholding status, to prevent possible risks, he added.