The People's Bank of China ("PBC") has recently issued the Order [2019] No. 1 to arrange the cancellation of the licensing mechanism for corporate bank accounts and meanwhile distributed the Circular on Abolishing the Licensing Mechanism for Corporate Bank Accounts (the "Circular") to clarify relevant work arrangements.
According to the Order No. 1 released by the central bank, the previous licensing mechanism for corporate bank accounts will be scrapped in batches nationwide as from February 25, 2019 and is expected to be completely abolished by the end of this year. Meanwhile, measures will be taken to intensify the management of bank accounts opened by enterprises and tighten the in-process and ex-post regulation in all aspects. At the first stage, the licensing mechanism for corporate bank accounts will be abolished in Jiangsu Province and Zhejiang Province, while areas where the abolishment will proceed subsequently will be determined later by stage depending on the progress of preparatory work completed by each province (autonomous region or municipality directly under the Central Government). The Circular provides further clarity on relevant matters, including "work arrangements", "the extent to which the licensing mechanism will be abolished" and "business management". Among others, the Circular states that, when enterprises with legal personality, unincorporated enterprises and privately-owned businesses open basic deposit accounts or temporary deposit accounts at banks, the previous approval mechanism will be superseded by the record-filing mechanism, if they are legally established within the territory of China, adding that the PBC will no longer issue the Licenses for Opening Accounts.