ANZ Banking Group plans to spend $250 million to increase its stake in Shanghai Rural Commercial Bank (SRCB).

This will increase ANZ's current 19 percent stake in SRCB to 20 percent, the allowable ownership for foreign banks in China, the company said in a statement.

SRCB is conducting a $1.2-billion capital raising to finance its expansion.

"ANZ's participation in SRCB's capital raising reflects our confidence in the partnership and our long term commitment to growing our presence in China," ANZ's chief executive of Asia Pacific, Europe and America Alex Thursby said in a statement. He added that China is part of the growth areas that the bank believes will further improve in time.

Since September 2007, ANZ has an estimated $318 million in total investments in SRCB. SRCB has 321 branches in Shanghai and targets predominantly retail and small to medium enterprises and now has more than five million customer accounts.