Recently, six agencies including the China Banking and Insurance Regulatory Commission ("CBIRC") have jointly issued the Circular on Further Regulating Credit and Financing Charges to Reduce Overall Financing Costs for Enterprises (the "Circular"), with effect from June 1, 2020.
The Circular contains 20 articles divided into six parts. Part I through Part IV articulate the requirements for different financing steps, Part V deals with the internal control and supervision of fee charging and Part VI urges supervisory synergy between departments and the offering of positive incentives. The Circular further states that with regard to credit loans, actions will be taken to cancel some enterprise-related charges, detail the existing rules regarding the prohibition of linking loans and deposits, the ban on forcible bundling, etc., and encourage banks to bring forward the credit loan review; as for assistance with loans, banks are required to make clear their fee charges, strengthen the management of third-party institutions, and evaluate the fee charging among their business partners. Additionally, the Circular urges banks and insurance institutions to leverage the role of corporate governance, improve their management bylaws for financing charges, regulate the conduct of their branches and employees, tighten the management of the fee-charging system, step up internal audit and fully disclose information on their services.