Law of the People's Republic of China on Commercial Banks
Law of the People's Republic of China on Commercial Banks
Law of the People's Republic of China on Commercial Banks
Order of the President of the People's Republic of China [1995] No.47
May 10,1995
Contents
Chapter I General provisions
Chapter II Establishment and Organizational Structure of Commercial Banks
Chapter IIIProtection of depositors Chapter IV Basic Rules for Loans and Other Business Operations
Chapter V Financial Affairs and Accounting
Chapter VI Supervision and Control
Chapter VII Assumption of Control and Termination
Chapter VIII Legal Liability
Chapter IX Supplementary Provisions
Chapter I General provisions
Article 1 This Law is enacted in order to protect the lawful rights and interests of commercial banks, depositors and other clients, to standardize the behavior of commercial banks, to raise the quality of credit assets, to strengthen supervision and control, to ensure the stable and sound operation of commercial banks, to maintain financial order and to promote the development of the socialist market economy.
Article 2 For the purposes of this Law, the term "commercial banks" means enterprise legal persons that are established in conformity with this Law and the Company Law of the People's Republic of China and that take in deposits from the general public, grant loans, handle settlements, etc.
Article 3 Commercial banks may engage in some or all of the following business operations:
1. taking in deposits from the general public;
2. granting short-term, medium-term and long-term loans;
3. handling domestic and foreign settlements;
4. handing the discounting of negotiable instruments;
5. issuing financial bonds;
6. acting as an agent for the issue, honoring and underwriting of government bonds;
7. buying and selling government bonds;
8. engaging in interbank lending;
9. buying and selling foreign exchange and acting as an agent for the pruchase and sale of foreign exchange;
10. providing letter of credit services and guaranty
11.acting as an agent for the receipt and payment of money and acting as an insurance agent;
12. providing safe deposit box services;
13. other business operations as approved by the People's Bank of China. The scope of business shall be specified in the articles of association of the commercial bank, and submitted to the People's Bank of China for approval.
Article 4 The business operations of commercial banks shall be governed by the principles of efficiency, safety and liquidity. Commercial banks shall make their own decisions regarding their business operations, take responsibility for their own risks, assume sole responsibility for their profits and losses and exercise self-restriction. Commercial banks shall, pursuant to law, conduct business operations without interference from any unit or individual. Commercial banks shall independently assume civil liability with their entire legal person property.
Article 5 Commercial banks shall adhere to the principles of equality, voluntarine1ss, fairness and good faith in business dealings with their clients.
Article 6 Commercial banks shall safeguard the lawful rights and interests of depositors against infringement by unit or individual.
Article 7 In credit transactions, commercial banks shall strictly examine the credit-worthiness of a borrower and implement the system of guaranty if order to ensure that the loan is recovered on schedule. Commercial banks shall be protected by law when they recover the principal of loans that have become due and the interest thereon from the borrowers in accordance with legal provisions.
Article 8 In business transactions, commercial banks shall abide by the relevant provisions of laws and administrative rules and regulations and may not harm the interests of the State or of the public.
Article 9 In business transactions, commercial banks shall abide by the principle of fair competition and may not engage in illegitimate competiton.
Article 10 Commercial banks shall accept supervision and control of the People's Bank of China according to law.
Chapter II Establishment and Organizational Structure of Commercial Banks
Article 11 the establishment of commercial banks shall be subject to examination and approval by the People's Bank of China. No unit or individual may engage in commercial banking business such as taking in deposits from the general public, and no unit may use the word "bank" in its name, without approval of the People's Bank of China.
Article 12 A commercial bank shall meet the following requirements for establishment:
1.having articles of association that conform to this Law and the Company Law of the People's Republic of China.
2.having the minimum amount of registered capital as specified in this Law;
3.having a chairman of the board (president ), general manager and other senior administrators with the necessary professional knowledge and experience in work;
4.having a sound organizational structure and management system;
5.having the required place of business, security and precautionary measures and other facilities relevant to it business operations. When examining applications for establishment, the People's Bank of China shall consider the needs of economic development and competition in the banking industry.
Article 13 The minimum amount of registered capital required for establishing a commercial bank be RMB 1 billion yuan. The minimum amount of registered capital required for establishing an urban cooperative commercial bank shall be RMB 100 million yuan, and the minimum amount of registered capital required for establishing a rural cooperative commercial bank shall be RMB 50 million yuan. Registered Capital shall be paid-up capital. The People's Bank of China may adjust the minimum amount of registered capital in light of economic development; however, the adjusted amount may not be lower than the amount specified in the preceding paragraph.
Article 14 To establish a commercial bank, the applicant shall provide the following documents and information to the People's Bank of China:
1. a written application, in which the name, location, registered capital, scope of business, etc. of the proposed commercial bank are clearly stated;
2. a feasibility study;
3. other documents and information to be provided as specified by the People's Bank of China.
Article 15 If an application for establishing a commercial bank is found, after examination, to be in conformity with the provisions of Article 14 of this Law, the applicant shall complete an official application form and provide the following documents and information:
1. a draft of the articles of association;
2.the qualification certificates of the senior administrators who are to hold office;
3.an investment verification certificate issued by a statutory investment verification organization;
4.a list of the names ,capital contributions and shares of shareholders;
5.credit-worthiness certificates and relevant information concerning the shareholders that hold at least 10 percent of the registered capital each;
6.business policies and plans;
7.information concerning the place of business, security and precautionary measures and other facilities relevant to business operations;
8.other documents and information as specified by the People's Bank of China.
Article 16 A commercial bank, the establishment of which has been approved, shall be issued a permit for operation by the People's Bank of China and, on the strength of such permit, register with the administrative department of industry and commerce and obtain a business license from it.
......