Banking Regulation Law of the People's Republic of China (Amended in 2006)

Banking Regulation Law of the People's Republic of China (Amended in 2006)

Banking Regulation Law of the People's Republic of China (Amended in 2006)

Order of the President [2003] No.58

December 27, 2003

(Adopted at the 6th Meeting of the Standing Committee of the Tenth National People's Congress on December 27, 2003; and amended in accordance with the Decision on Amending the Law of the People's Republic of China on Regulation of and Supervision over the Banking Industry adopted at the 24th Meeting of the Standing Committee of the Tenth National People's Congress on October 31, 2006)

Contents
Chapter I General Provisions
Chapter II Regulatory Authorities
Chapter III Regulatory Functions
Chapter IV Regulatory Measures
Chapter V Legal Liability
Chapter VI Supplementary Provisions

Chapter I General Provisions

Article 1 This Law has been formulated in order to strengthen banking industry regulation, standardize regulatory practices, prevent and resolve banking risks, protect the legitimate rights and interests of depositors and other clients, and encourage the healthy development of the banking industry.

Article 2 The banking regulatory authority under the State Council shall be responsible for regulating banking financial institutions and their business activities throughout the country.
For the purposes of this Law, the term "banking financial institutions" shall mean financial institutions established in the People's Republic of China that take deposits from the public, such as commercial banks, urban credit cooperatives and rural credit cooperatives, and policy banks.
The provisions of this Law that relate to the regulation of banking financial institutions shall apply to financial asset management companies, trust and investment companies, finance companies, financial leasing companies and other financial institutions established in the People's Republic of China and approved by the banking regulatory authority under the State Council.
The banking regulatory authority under the State Council shall, in accordance with the relevant provisions of this Law, regulate those financial institutions it approves to become established outside China and the foreign business activities of the financial institutions specified in the two preceding paragraphs.

Article 3 The objectives of banking industry regulation shall be to promote the lawful and stable operation of the banking industry and to safeguard the confidence of the public therein.
Banking industry regulation shall protect fair competition in the banking industry and enhance the competitiveness thereof.

Article 4 The banking regulatory authorities shall regulate the banking industry in accordance with the principles of legality, openness, impartiality and efficiency.

Article 5 The lawful performance of regulatory functions by the banking regulatory authorities and their personnel engaged in regulatory work shall be protected by law, and shall not be subject to interference by any local government, government department at any level, social organization or individual.

Article 6 The banking regulatory authority under the State Council shall establish a regulatory information sharing mechanism with the People's Bank of China and other financial regulatory authorities under the State Council.

Article 7 The banking regulatory authority under the State Council may establish mechanisms for regulatory cooperation with the banking regulatory authorities of other countries or regions to implement cross-border regulation.

Chapter II Regulatory Authorities

Article 8 The banking regulatory authority under the State Council shall establish representative agencies according to its requirements in performing its functions. The banking regulatory authority under the State Council shall lead and administer its representative agencies in a unified manner.
The representative agencies of the banking regulatory authority under the State Council shall perform their regulatory functions within the scope authorized by the banking regulatory authority under the State Council.

Article 9 Banking regulatory authority personnel engaged in regulatory work shall possess the professional knowledge and work experience appropriate to their posts.

Article 10 Banking regulatory authority personnel shall be faithful in the performance of their duties, shall carry out their work according to law, shall be impartial and honest, shall not seek improper benefits by taking advantage of their positions, and shall not hold any concurrent position in a financial institution or other enterprise.

Article 11 Banking regulatory authority personnel shall maintain state secrets in accordance with the law and shall be responsible for maintaining the confidentiality of information gained from banking financial institutions they regulate and other relevant parties .
When the banking regulatory authority under the State Council exchanges regulatory information with banking regulatory authorities in other countries or regions, it shall make arrangements to maintain the confidentiality of such information.

Article 12 The banking regulatory authority under the State Council shall publicize its regulatory procedures and establish a regulatory responsibility system and an internal supervisory system.

Article 13 Local government and relevant departments at all levels shall provide assistance to and coordinate with the banking regulatory authorities in their performance of regulatory activities such as the management of risks in banking financial institutions and the investigation and handling of relevant illegal financial conduct.

Article 14 The audit and supervisory authorities under the State Council shall supervise the activities of the banking regulatory authority under the State Council in accordance with applicable provisions.

Chapter III Regulatory Functions

Article 15 The banking regulatory authority under the State Council shall formulate and issue rules and regulations on the regulation of banking financial institutions and their business activities in accordance with laws and administrative regulations.

Article 16 The banking regulatory authority under the State Council shall examine and approve the establishment of, changes in, the winding up and the business scopes of banking financial institutions in accordance with the criteria and procedures stipulated in laws and regulations.

Article 17 In the case of an application to establish a banking industry financial institution, or where a banking industry financial institution changes the total amount of capital it holds or the total percentage of shares owned by a shareholder reaches or exceeds the stipulated limit, the banking regulatory authority under the State Council shall examine the shareholders' sources of funds, financial status, capacity to supplement capital and creditworthiness.

Article 18 The types of business activities included in the business scope of a banking industry financial institution shall be examined and approved by, or filed for the record with, the banking regulatory authority under the State Council in accordance with applicable provisions.
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