Chinese mainland stock markets saw gains on Monday, with banks rising strongly on news that they may operate brokerage services in the future.

The benchmark Shanghai Composite Index rose by 1.89 percent or 61.22 points to 3,302.41 points on Monday. The Shenzhen Component Index gained by 1.24 percent or 140.83 points to 11,533.23 points.

The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen closed up by 1.70 percent or 59.23 points at 3,537.75 points.

Total turnover on the two bourses was 657.22 billion yuan ($104.93 billion), slightly up from the previous trading day's 653.27 billion yuan.

Mainland markets saw a decline in the morning session but strong performance by banks and insurers reversed the trend by close of trading, after media reports said that Industrial Bank had submitted an application to acquire Huafu Securities. Industrial Bank jumped by 8.72 percent to 14.71 yuan on Monday.

The banking sector was also boosted by the news that Industrial Bank and Bank of Communications are likely to become the first lenders to obtain brokerage licenses in the mainland.

The news followed an announcement on Friday by the China Securities Regulatory Commission that commercial banks can apply for securities licenses, which is expected to offer a new source of revenue for mainland lenders. But it also means there will be more competition for brokerage companies.

Securities firms fell more than 2 percent on average on Monday while banks rose by almost 5 percent on average. Bank of Nanjing and Bank of Ningbo soared by the daily limit of 10 percent to 13.72 yuan and 15.57 yuan, respectively.

ChiNext, the country's NASDAQ-style board for high-tech and emerging start-ups, rose by 2.20 percent or 42.99 points to 1,994.39 points. In Hong Kong, the Hang Seng Index fell 0.17 percent or 40.95 points to 24,123.05, with total turnover of HK$76.46 billion ($9.85 billion).