Administrative Regulations of the People's Republic of China on Foreign-invested Banks (Second Revision in 2014)
Administrative Regulations of the People's Republic of China on Foreign-invested Banks (Second Revision in 2014)
Administrative Regulations of the People's Republic of China on Foreign-invested Banks (Second Revision in 2014)
Order of the State Council of the People's Republic of China No.657
November 27, 2014
(Promulgated under the Order of the State Council of the People's Republic of China No.478 on November 11, 2006, revised for the first time in accordance with the Decision of the State Council on Revising Certain Administrative Regulations on July 29, 2014, and revised for the second time in accordance with the Decision of the State Council on the Revision of the Administrative Regulations of the People's Republic of China on Foreign-invested Banks on November 27, 2014)
Chapter I General Provisions
Article 1 The Administrative Regulations of the People's Republic of China on Foreign-invested Banks (hereinafter referred to as the "Regulations") are formulated in order to adapt to the needs of opening to the outside world and economic development, strengthen and improve the administration of foreign-invested banks and promote the sound operation of the banking industry.
Article 2 For the purpose of the Regulations, the term "foreign-invested bank" refers to the following institutions established upon approval within the territory of the People's Republic of China according to the relevant laws and regulations of the People's Republic of China:
1. a wholly foreign-owned bank established separately by one foreign bank or jointly with investment from one foreign bank and other foreign financial institutions;
2. a Sino-foreign joint venture bank established with joint investment from foreign financial institutions and Chinese companies and enterprises;
3. a branch of a foreign bank; and
4. a representative office of a foreign bank.
The above-mentioned institutions set forth in Items 1 through 3 are hereinafter collectively referred to as the business institutions of foreign-invested banks.
Article 3 For the purpose of the Regulations, the term "foreign financial institutions" refers to the financial institutions registered outside the territory of the People's Republic of China and approved or permitted by the financial regulatory authorities of their home countries or regions.
For the purpose of the Regulations, the term "foreign banks" refers to the commercial banks registered outside the territory of the People's Republic of China and approved or permitted by the financial regulatory authorities of their home countries or regions.
Article 4 Any and all foreign-invested banks must abide by the laws and regulations of the People's Republic of China and shall never impair the national interests and social and public interests of the People's Republic of China.
All the regular business activities and lawful rights and interests of foreign-invested banks are protected by the law of the People's Republic of China.
Article 5 The banking regulatory authority of the State Council and its local offices (hereinafter collectively referred to as the "banking regulatory authorities") are responsible for the supervision and administration of foreign-invested banks and their activities, and provided that the provisions of laws and administrative regulations have prescribed that other regulatory departments or authorities shall supervise and administer foreign-invested banks and their activities, such provisions shall apply.
Article 6 The banking regulatory authority of the State Council shall formulate the relevant incentives and guiding measures according to the regional economic development strategy and the relevant policies of the State, which will be reported to the State Council for approval of implementation.
Chapter II Establishment and Registration
Article 7 The establishment of foreign-invested banks and their branch offices shall be subject to the examination and approval of the banking regulatory authorities.
Article 8 The minimum amount of registered capital of a wholly foreign-owned bank or of a Sino-foreign joint venture bank shall be CNY1 billion or the equivalent in a freely convertible currency and the registered capital shall be the paid-in capital.
With respect to a branch established by a wholly foreign-owned bank or by a Sino-foreign joint venture bank within the territory of the People's Republic of China, its head office shall grant without compensation operating capital in Renminbi or a freely convertible currency. The sum of operating capital granted by a wholly foreign-owned bank or a Sino-foreign joint venture bank to its establishments shall not exceed 60% of total equity capital of the head office.
With respect to a branch of a foreign bank, the head office shall grant it working capital of no less than CNY200 million or the equivalent in a freely convertible currency.
The banking regulatory authority of the State Council may raise the minimum amount of the registered capital or working capital set for the business institutions of foreign-invested banks and stipulate the proportion of the share of Renminbi according to their business scopes and the need for prudential regulation.
Article 9 The shareholders of a proposed wholly foreign-owned bank or of a proposed Sino-foreign joint venture bank or the foreign bank that proposes to establish branches or representative offices shall meet the following requirements:
1. being of ongoing profitability, good credit standing and having no record of major violation of laws or regulations;
2. that the shareholders of a proposed wholly foreign-owned bank, or the foreign shareholders of a Sino-foreign joint venture bank, or a foreign bank that proposes to establish branches or representative offices shall have experiences in international financial activities;
3. having effective policies on anti-money laundering activities;
4. that the shareholders of a proposed wholly foreign-owned bank, or the foreign shareholders of a Sino-foreign joint venture bank, or a foreign bank that proposes to establish branches or representative offices shall be subject to effective regulation by the financial regulatory authority of the country or region of the place where they are located with their applications approved by such financial regulatory authority; and
5. that other prudential requirements required by the banking regulatory authority of the State Council shall be satisfied.
The country or region where the shareholders of a proposed wholly foreign-owned bank, or the foreign shareholders of a Sino-foreign joint venture bank, or a foreign bank that proposes to establish branches or representative offices are located shall have sound financial supervision and administration systems and their financial regulatory authorities shall have established good regulatory cooperation mechanism with the banking regulatory authority of the State Council.
Article 10 A shareholder that proposes to establish a wholly foreign-owned bank shall be a financial institution, and in addition to the requirements as set out in Article 9 of the Regulations, the sole shareholder or the controlling shareholder shall also meet the following requirements:
1. that it must be commercial banks;
2. that the total assets as at the end of the year prior to the application for establishment shall be no less than USD10 billion; and
3. that the capital adequacy ratio shall meet the requirement of the financial regulatory authority of the country or region where it is located and the banking regulatory authority of the State Council.
Article 11 Where shareholders propose to establish a Sino-foreign joint venture bank, in addition to the requirements as set out in Article 9 of the Regulations, the foreign shareholder and the sole Chinese shareholder or any principal Chinese shareholder shall be a financial institution and the sole foreign shareholder or any principal shareholder shall also meet the following requirements:
1. that it must be a commercial bank;
2. that the total assets as at the end of the year prior to the application for establishment shall be no less than USD10 billion; and
3. that the capital adequacy ratio shall meet the requirement of the financial regulatory authority of the country or region where it is located and the banking regulatory authority of the State Council.
Article 12 In addition to the requirements as set out in Article 9 of the Regulations, any foreign bank proposing to establish branches shall also meet the following requirements:
1. that its total assets as at the end of the year prior to the application for establishment shall be no less than USD20 billion; and
2. that the capital adequacy ratio shall meet the requirement of the financial regulatory authority of the country or region where it is located and the banking regulatory authority of the State Council.
Article 13 The foreign bank that establishes a business institution within the territory of the People's Republic of China shall not establish additional representative offices besides the existing ones, except in regions where the establishment is in line with Chinese regional economic development strategies and the relevant policies.
When any representative office is restructured into a business institution upon approval, the procedures for cancelling registration of the former representative office shall be followed in accordance with the law.
Article 14 For establishing a business institution of a foreign-invested bank, application shall be made for preparation first, with the following application materials submitted to the banking regulatory authority of the place where such institution is proposed to be established:
1.
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