After numerous rejections and delays, Chinese banks are slowly invading the U.S. banking system.

On Wednesday, the Federal Reserve had officially stamped its approval on the application of Industrial and Commercial Bank of China Ltd (ICBC), China's largest bank, to become a bank holding company through its acquisition of The Bank of East Asia (U.S.A.). The U.S. central bank likewise approved the applications of the Bank of China Ltd. and Agricultural Bank of China Ltd. to open new branches in the U.S.

This is the first that the U.S. allowed an American bank be bought by a Chinese one.

"It's a significant milestone for China and the Chinese banks, which will allow them to engage in further business in the U.S. and Europe as well," Chris Daniel, a banking lawyer, said in The Wall Street Journal.

Seventy per cent owned by the government of China, ICBC will become a holding company, along with China Investment Corporation (CIC) and Huijin Investment Ltd., of The Bank of East Asia (U.S.A.) in New York. ICBC's total assets are placed at an estimated $2.5 trillion.

Acquiring 80 per cent in The Bank of East Asia (U.S.A.) for $140 million, ICBC gets an immediate 10 branches in California and three in New York.

"This unprecedented acquisition of a controlling stake in a U.S. commercial bank by a mainland bank is strategically significant," Xinhua quoted ICBC chairman Jiang Jianqing as saying.

"This could accelerate M&A as Chinese banks may look to acquire regional banks in order to establish a U.S. footprint," Bloomberg News quoted analyst Jaret Seiberg as saying in a note to clients.

The Fed, however, downplayed any China bank invasion as the ICBC acquisition is "relatively small."

"It would not have much of an impact on the banking market. The combined deposits of the relevant institutions in the Metropolitan New York banking market represent less than one percent of market deposits," the central bank noted.