Law of the People's Republic of China on Commercial Banks (Amended in 2015)
Law of the People's Republic of China on Commercial Banks (Amended in 2015)
Law of the People's Republic of China on Commercial Banks (Amended in 2015)
Order of the President of the People's Republic of China No. 34
August 29, 2015
(Adopted at the 13th Session of the Standing Committee of the 8th National People's Congress on May 10, 1995; amended for the first time according to the Decision on Revising the Law of the People's Republic of China on Commercial Banks passed at the 6th Session of the Standing Committee of the 10th National People's Congress on December 27, 2003; and amended for the second time according to the Decision on Revising the Law of the People's Republic of China on Commercial Banks passed at the 16th Session of the Standing Committee of the 12th National People's Congress on August 29, 2015)
Table of Contents
Chapter I General Provisions
Chapter II Establishment and Organization of Commercial Banks
Chapter III Protection for Depositors
Chapter IV Basic Rules Governing Loans and Other Businesses
Chapter V Financial Affairs and Accounting
Chapter VI Supervision and Control
Chapter VII Take-over and Termination
Chapter VIII Legal Liabilities
Chapter IX Supplementary Provisions
Chapter I General Provisions
Article 1 This Law is formulated in order to protect the lawful rights and interests of commercial banks, depositors and other clients, regulate the behavior of commercial banks, improve the quality of credit assets, strengthen supervision and control, ensure the sound and stable operation of commercial banks, safeguard financial order and promote the development of the socialist market economy.
Article 2 The "commercial banks" referred to in this Law mean enterprise legal persons which are established under this Law and the Company Law of the People's Republic of China and which take in deposits from the general public, grant loans, handle settlement of accounts and engage in other business operations.
Article 3 A commercial bank 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 settlement of both domestic and overseas accounts;
4. Handling acceptance and discount 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 or financial bonds;
8. Engaging in inter-bank lending;
9. Buying and selling foreign exchange and acting as an agent for the purchase and sale of foreign exchange;
10. Engaging in the business of bank cards;
11. Providing letter of credit services and guaranty;
12. Acting as an agent for the receipt and payment of money and acting as an insurance agent;
13. Providing safe deposit boxes services; and
14. Other businesses as approved by the banking regulatory organ of the State Council.
The business scope of a commercial bank shall be specified in the articles of association of the bank and reported to the banking regulatory organ of the State Council for approval.
A commercial bank may engage in the business of the settlement and sale of foreign exchange upon the approval of the People's Bank of China.
Article 4 Commercial banks shall act under the principles of safety, liquidity and efficiency and with full autonomy, assume sole responsibility for their own risks as well as profits and losses, and exercise self-restraint.
Commercial banks shall carry out business in accordance with the law, free from interference from any entities or individuals.
Commercial banks shall bear civil liability independently with all their property as legal persons.
Article 5 Commercial banks shall follow the principles of equality, voluntariness, fairness, and good faith in their services to clients.
Article 6 Commercial banks shall protect the lawful rights and interests of depositors against infringement by any entity or individual.
Article 7 Commercial banks shall, in granting loans, strictly examine the credit-worthiness of a borrower and implement the system of guaranty in order to ensure timely recovery of the loan.
Commercial banks are protected by law when they recover the principal of loans that have become due and the interest thereon from borrowers in accordance with legal provisions.
Article 8 Commercial banks shall carry out business in accordance with the relevant provisions of laws and administrative regulations, and shall not do harm to the interests of the state or the public.
Article 9 Commercial banks shall carry out business under the principle of fair competition, and shall not engage in any unfair competition.
Article 10 Commercial banks shall be subject to the supervision of the banking regulatory organ of the State Council according to law, unless otherwise the law prescribes that the relevant business thereof shall be subject to the supervision of any other regulatory department or organ, the provisions shall prevail.
Chapter II Establishment and Organization of Commercial Banks
Article 11 The establishment of a commercial bank shall be subject to the examination and approval of the banking regulatory organ of the State Council.
No entity or individual may engage in absorbing public deposits or other businesses of a commercial bank, nor shall any entity use the word "bank" in its name without the approval of the banking regulatory organ of the State Council.
Article 12 The following requirements shall be met in establishing a commercial bank:
1. Having Articles of association in accordance with this Law and the provisions of the Company Law of the People's Republic of China;
2. Having a registered capital that meets the minimum amount in accordance with the provisions of this Law;
3. Having directors and senior management personnel with professional knowledge in holding the post and work experiences;
4. Having sound organizations and management systems; and
5. Having a place of business accompanied with safeguarding measures meeting the requirements and other facilities in relation to the business.
Other prudential conditions shall also be met for the establishment of a commercial bank.
Article 13 The minimum amount of registered capital for establishing a national commercial bank shall be CNY1 billion. The minimum amount of registered capital for establishing a city commercial bank shall be CNY100 million, and for a rural commercial bank the minimum amount of registered capital shall be CNY50 million. The registered capital shall be paid-in capital.
The banking regulatory organ of the State Council may adjust the minimum amount of registered capital as required for prudential supervision, but the amounts thereof shall be no less than the amount as prescribed in the preceding paragraph.
Article 14 An applicant shall submit the following documents and materials to the banking regulatory organ of the State Council for establishing a commercial bank:
1. An application, specifying the name, locations, amount of registered capital, and business scope of the commercial bank to be set up;
2. A feasibility study report; and
3. Other documents and materials that shall be submitted as required by the banking regulatory organ of the State Council.
Article 15 Where an application for establishment of a commercial bank is in accord with the provisions of Article 14 hereof, an applicant shall fill in a formal application, and submit the following documents and materials:
1. The draft of the Articles of association;
2. Qualification certificates of the directors and senior management personnel to assume the posts;
3. Certificate of capital issued by a statutory capital verification organ;
4. Name list of shareholders and the amount of capital contributions and shares thereof;
5. Certificates of credibility and relevant documents of the shareholders who hold more than 5% of the registered capital;
6. Business policies and plans;
7. Place of business accompanied with safeguarding measures and documents of other facilities in relation to the business; and
8. Other documents and materials as required by the banking regulatory organ of the State Council.
Article 16 Commercial banks established upon approval shall be issued permit for operation by the banking regulatory organ of the State Council, and go through registration formalities with the department of industry and commerce administration upon the strength of the permit and get the business license.
Article 17 The organization form and setup of a commercial bank shall be applicable to the provisions of the Company Law of the People's Republic of China.
Where a commercial bank, which was established before the promulgation of this law has its organization form and setup not in full compliance with the provisions of the Company Law of the People's Republic of China, it may continue to operate under the original form and setup, and the date the provisions of the preceding paragraph shall apply is determined by the State Council.
Article 18 A wholly state-owned commercial bank shall set up a board of supervisors, the measures for its formation shall be prescribed by the State Council.
The board of supervisors shall carry out supervision over the quality of the loan assets of the wholly state-owned commercial bank, its asset-liability ratio, present and added values of the state-owned assets, etc., and the acts of the senior management personnel in violation of laws, administrative regulations, or Articles of association, as well as that acts damaging the interests of the bank.
Article 19 A commercial bank may set up branches both within and outside the territory of the People's Republic of China subject to businessneeds, which shall be subject to the examination and approval of the banking regulatory organ of the State Council.
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Order of the President of the People's Republic of China No. 34
August 29, 2015
(Adopted at the 13th Session of the Standing Committee of the 8th National People's Congress on May 10, 1995; amended for the first time according to the Decision on Revising the Law of the People's Republic of China on Commercial Banks passed at the 6th Session of the Standing Committee of the 10th National People's Congress on December 27, 2003; and amended for the second time according to the Decision on Revising the Law of the People's Republic of China on Commercial Banks passed at the 16th Session of the Standing Committee of the 12th National People's Congress on August 29, 2015)
Table of Contents
Chapter I General Provisions
Chapter II Establishment and Organization of Commercial Banks
Chapter III Protection for Depositors
Chapter IV Basic Rules Governing Loans and Other Businesses
Chapter V Financial Affairs and Accounting
Chapter VI Supervision and Control
Chapter VII Take-over and Termination
Chapter VIII Legal Liabilities
Chapter IX Supplementary Provisions
Chapter I General Provisions
Article 1 This Law is formulated in order to protect the lawful rights and interests of commercial banks, depositors and other clients, regulate the behavior of commercial banks, improve the quality of credit assets, strengthen supervision and control, ensure the sound and stable operation of commercial banks, safeguard financial order and promote the development of the socialist market economy.
Article 2 The "commercial banks" referred to in this Law mean enterprise legal persons which are established under this Law and the Company Law of the People's Republic of China and which take in deposits from the general public, grant loans, handle settlement of accounts and engage in other business operations.
Article 3 A commercial bank 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 settlement of both domestic and overseas accounts;
4. Handling acceptance and discount 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 or financial bonds;
8. Engaging in inter-bank lending;
9. Buying and selling foreign exchange and acting as an agent for the purchase and sale of foreign exchange;
10. Engaging in the business of bank cards;
11. Providing letter of credit services and guaranty;
12. Acting as an agent for the receipt and payment of money and acting as an insurance agent;
13. Providing safe deposit boxes services; and
14. Other businesses as approved by the banking regulatory organ of the State Council.
The business scope of a commercial bank shall be specified in the articles of association of the bank and reported to the banking regulatory organ of the State Council for approval.
A commercial bank may engage in the business of the settlement and sale of foreign exchange upon the approval of the People's Bank of China.
Article 4 Commercial banks shall act under the principles of safety, liquidity and efficiency and with full autonomy, assume sole responsibility for their own risks as well as profits and losses, and exercise self-restraint.
Commercial banks shall carry out business in accordance with the law, free from interference from any entities or individuals.
Commercial banks shall bear civil liability independently with all their property as legal persons.
Article 5 Commercial banks shall follow the principles of equality, voluntariness, fairness, and good faith in their services to clients.
Article 6 Commercial banks shall protect the lawful rights and interests of depositors against infringement by any entity or individual.
Article 7 Commercial banks shall, in granting loans, strictly examine the credit-worthiness of a borrower and implement the system of guaranty in order to ensure timely recovery of the loan.
Commercial banks are protected by law when they recover the principal of loans that have become due and the interest thereon from borrowers in accordance with legal provisions.
Article 8 Commercial banks shall carry out business in accordance with the relevant provisions of laws and administrative regulations, and shall not do harm to the interests of the state or the public.
Article 9 Commercial banks shall carry out business under the principle of fair competition, and shall not engage in any unfair competition.
Article 10 Commercial banks shall be subject to the supervision of the banking regulatory organ of the State Council according to law, unless otherwise the law prescribes that the relevant business thereof shall be subject to the supervision of any other regulatory department or organ, the provisions shall prevail.
Chapter II Establishment and Organization of Commercial Banks
Article 11 The establishment of a commercial bank shall be subject to the examination and approval of the banking regulatory organ of the State Council.
No entity or individual may engage in absorbing public deposits or other businesses of a commercial bank, nor shall any entity use the word "bank" in its name without the approval of the banking regulatory organ of the State Council.
Article 12 The following requirements shall be met in establishing a commercial bank:
1. Having Articles of association in accordance with this Law and the provisions of the Company Law of the People's Republic of China;
2. Having a registered capital that meets the minimum amount in accordance with the provisions of this Law;
3. Having directors and senior management personnel with professional knowledge in holding the post and work experiences;
4. Having sound organizations and management systems; and
5. Having a place of business accompanied with safeguarding measures meeting the requirements and other facilities in relation to the business.
Other prudential conditions shall also be met for the establishment of a commercial bank.
Article 13 The minimum amount of registered capital for establishing a national commercial bank shall be CNY1 billion. The minimum amount of registered capital for establishing a city commercial bank shall be CNY100 million, and for a rural commercial bank the minimum amount of registered capital shall be CNY50 million. The registered capital shall be paid-in capital.
The banking regulatory organ of the State Council may adjust the minimum amount of registered capital as required for prudential supervision, but the amounts thereof shall be no less than the amount as prescribed in the preceding paragraph.
Article 14 An applicant shall submit the following documents and materials to the banking regulatory organ of the State Council for establishing a commercial bank:
1. An application, specifying the name, locations, amount of registered capital, and business scope of the commercial bank to be set up;
2. A feasibility study report; and
3. Other documents and materials that shall be submitted as required by the banking regulatory organ of the State Council.
Article 15 Where an application for establishment of a commercial bank is in accord with the provisions of Article 14 hereof, an applicant shall fill in a formal application, and submit the following documents and materials:
1. The draft of the Articles of association;
2. Qualification certificates of the directors and senior management personnel to assume the posts;
3. Certificate of capital issued by a statutory capital verification organ;
4. Name list of shareholders and the amount of capital contributions and shares thereof;
5. Certificates of credibility and relevant documents of the shareholders who hold more than 5% of the registered capital;
6. Business policies and plans;
7. Place of business accompanied with safeguarding measures and documents of other facilities in relation to the business; and
8. Other documents and materials as required by the banking regulatory organ of the State Council.
Article 16 Commercial banks established upon approval shall be issued permit for operation by the banking regulatory organ of the State Council, and go through registration formalities with the department of industry and commerce administration upon the strength of the permit and get the business license.
Article 17 The organization form and setup of a commercial bank shall be applicable to the provisions of the Company Law of the People's Republic of China.
Where a commercial bank, which was established before the promulgation of this law has its organization form and setup not in full compliance with the provisions of the Company Law of the People's Republic of China, it may continue to operate under the original form and setup, and the date the provisions of the preceding paragraph shall apply is determined by the State Council.
Article 18 A wholly state-owned commercial bank shall set up a board of supervisors, the measures for its formation shall be prescribed by the State Council.
The board of supervisors shall carry out supervision over the quality of the loan assets of the wholly state-owned commercial bank, its asset-liability ratio, present and added values of the state-owned assets, etc., and the acts of the senior management personnel in violation of laws, administrative regulations, or Articles of association, as well as that acts damaging the interests of the bank.
Article 19 A commercial bank may set up branches both within and outside the territory of the People's Republic of China subject to businessneeds, which shall be subject to the examination and approval of the banking regulatory organ of the State Council.
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