The Standing Committee of the National People’s Congress Order of the Chairman of the People’s Republic of China No.11 The Banking Supervision Law of the People’s Republic of China was adopted at the 6th session of the Standing Committee of the 10th Hu Jintao, Chairman of the People’s Republic of China December 27, 2003 Banking Supervision Law of the People’s Republic of China ContentChapter I. General Provisions Chapter II. Supervision Institutions Chapter III. Supervision Functions Chapter IV. Supervision Measures Chapter V. Legal Liabilities Chapter VI. Supplementary Provisions Chapter I. General Provisions Article 1 The present Law is formulated to strengthen the supervision over the banking industry, regulate the activities of supervision, prevent Article 2 The banking supervision institution of the State Council shall be responsible for the supervision over the nationwide banking financial The term “banking financial institutions” as mentioned in the present Law refers to the commercial banks, urban credit cooperatives, The present Law shall be applicable to the supervision over the financial assets management companies, trust investment companies, The banking supervision institution of the State Council shall, in accordance with the relevant provisions of the present Law, conduct Article 3 The banking supervision shall be targeted for promoting the lawful, steady, and sound operations of the banking industry, and maintaining The banking supervision shall protect the fair competitions of banking and improve the competitive ability of the banking industry. Article 4 When conducting banking supervision, the banking supervision institutions shall comply with the principle of law compliance, openness, Article 5 The banking supervision institutions and their functionaries engaged in banking supervision shall perform their duties in accordance Article 6 The banking supervision institution of the State Council shall establish a supervision information sharing system with the People’s Article 7 The banking supervision institution of the State Council may also establish cooperation systems with the banking supervision institutions Chapter II. Supervision Institutions Article 8 The banking supervision institution of the State Council may set up dispatched institutions in light of the needs for exercising their The institutions dispatched by the banking supervision institution of the State Council shall, within the powers granted by the banking Article 9 Among the functionaries of the banking supervision institutions, those engaged in supervision shall have the professional knowledge Article 10 The functionaries of the banking supervision institutions shall devote to their duties, handle matters in pursuance of the law, be Article 11 The functionaries of banking supervision institutions shall keep the secrets of the state in accordance with the law, and shall be Where the banking supervision institution of the State Council exchanges supervision information with the banking supervision institutions Article 12 The banking supervision institution of the State Council shall disclose the supervision procedures, shall establish supervision responsibility Article 13 When the banking supervision institutions deal with the risks of a banking financial institution, investigate into and punish relevant Article 14 The auditing, supervision and other organs of the State Council shall conduct supervision over the activities of the banking supervision Chapter III. Supervision Duties Article 15 In accordance with the law and the administrative regulations, the banking supervision institution of the State Council shall formulate Article 16 In pursuance of the requirements and procedures as prescribed in the laws and the administrative regulations, the banking supervision Article 17 With regard to an applicant for establishing a financial institution or a banking financial institution that modifies the shareholder Article 18 The operations within the operation scope of a banking financial institution shall be subject to the examination and approval of or Article 19 Without approval of the banking supervision institution of the State Council, no entity or individual may establish any banking financial Article 20 The banking supervision institution of the State Council shall adopt qualification management for the appointment of directors and Article 21 The rules for prudent operations governing the banking financial institutions may be provided for in the laws and administrative regulations, The term “rules for prudent operations” as mentioned in the preceding paragraph covers the risk management, internal control, capital All banking financial institutions shall strictly abide by the rules for prudent operations. Article 22 The banking supervision institution of the State Council shall, within the prescribed time limit, make a written decision about approving (1) The establishment of a banking financial institution, within 6 months from the day when the application documents are received; (2) The modification or termination, the operation scope and the operations added to the operation scope of a banking financial institution, (3) The examination of the qualifications of the directors and senior managerial personnel, within 30 days from the day when the application Article 23 The banking supervision institutions shall conduct non-on-site supervision over the operations and risk status of the banking financial Article 24 A banking supervision institution shall conduct on-site inspection on the operations and risk status of the banking financial institutions. The banking supervision institution of the State Council shall formulate on-site inspection procedures, and regulate on-site inspections. Article 25 The banking supervision institution of the State Council shall adopt consolidated financial statements in conducting supervision over Article 26 With regard to the advice given by the People’s Bank of China about the inspection on banking financial institutions, the banking Article 27 The banking supervision institution of the State Council shall establish a banking financial institution supervision grade evaluation Article 28 The banking supervision institution of the State Council shall establish a post responsibility system for the discovery and reporting Where a banking supervision institution discovers an emergency may result in a systematic banking risk or may seriously affect the Article 29 The banking supervision institution shall, jointly with the People’s Bank of China, the finance department of the State Council and Article 30 The banking supervision institution of the State Council shall be responsible for the making of unified statistics and statements Article 31 The banking supervision institution of the State Council shall guide and supervise the activities of the banking self-disciplinary The constitution of any banking self-disciplinary organization shall be submitted to the banking supervision institution of the State Article 32 The banking supervision institution of the State Council may carry out activities of international communication and cooperation related Chapter IV. Supervision Measures Article 33 A banking supervision institution shall, in light of the needs to perform its duties, have the power to demand the banking financial Article 34 In accordance with the requirement of prudent supervision, a banking supervision institution shall taking following measures for conducting (1) To conduct inspection by entering into a banking financial institution; (2) To question the functionaries of the banking financial institution, to demand them to give explanations about the relevant to-be-inspected (3) To examine and copy the documents and materials relating to the to-be-inspected items, to seal up the documents and materials that (4) To examine the banking financial institution’s computer system for operation data management. An on-site inspection shall be subject to the approval of the person-in-charge of the banking supervision institution. In an on-site Article 35 In light of the needs to perform the duties, a banking supervision institution may talk with the directors and the senior managerial Article 36 The banking supervision institutions shall order the banking supervision institutions to faithfully disclose the information about Article 37 Where a banking financial institution is in violation of the prudent operation rules, the banking supervision institution of the State (1) To order it to suspend some of its operations, to stop approving new operations; (2) To restrict the distribution of bonus and other incomes; (3) To restrict the alienation of assets; (4) To order the controlling shareholder to transfer its stock right or to restrict the powers of relevant shareholders; (5) To order it to replace the directors and senior managerial personnel or restrict their powers; (6) To stop approving the establishment of any new branches. After a banking financial institution gets right, it shall submit a report to the banking supervision institution of the State Council Article 38 Where a banking financial institution has already had or may have a credit crisis, which seriously impairs the legitimate rights and Article 39 Where a banking financial institution conducts illegal operations or faulty operations and management, and it will seriously impair Article 40 Where a banking financial institution is taken over, restructured or canceled, the banking supervision institution of the State Council During the course of taking over, restructure or cancellation liquidation, the following measures may be taken against the direct (1) If the direct liable directors, senior managerial personnel and other direct liable persons exit China, and the interests of the state (2) It shall request the judicial organ to prohibit the banking financial institution from moving, transferring its properties or setting Article 41 Upon approval of the person-in-charge of the banking supervision institution of the State Council or upon approval of the person-in-charge Chapter V. Legal Liabilities Article 42 Any of the functionaries engaged in supervising banking supervision institutions is under any of the following circumstances shall (1) Violating the requirements in examining and approving the establishment, modifications, termination, operation scope and the specific (2) Violating the requirements in conducting on-site inspections on the banking financial institutions; (3) Failing to report the emergencies in accordance with Article 28 of the present Law; (4) Violating the requirements in inquiring about the banking accounts or applying for freezing them; (5) Violating the requirements in taking measures against or punishing a banking financial institution; or (6) Other offences of abusing his (her) powers or neglecting his (her) duties. With regard to a functionary engaged in supervising banking supervision institutions who embezzles public funds, accepts bribes, betrays Article 43 Any one who establishes a banking financial institution without approval or illegally carries on operations as a banking financial Article 44 Where a banking financial institution is under any of the following circumstances, it shall be ordered to get right by the banking (1) Establishing a branch without approval; (2) Making modification or terminating without approval; (3) Violating any of the regulations, or carrying on operations without approval or without registration; (4) Violating any of the regulations, elevating or lowering savings interest rates and credit interest rates. Article 45 Where a banking financial institution is under any of the following circumstances, it shall be ordered to get right by the banking (1) Appointing directors and senior managerial personnel without undergoing qualification examination; (2) Refusing or hindering the non-on-site supervisions or on-site inspections; (3) Providing false statements, reports and other documents and materials or providing statements, reports and other documents and materials (4) Failing to disclose the information as required; (5) Violating the prudent operation rules seriously; or (6) Refusing to execute the measures as provided in Article 37 of the present Law. Article 46 Where a banking financial institution fails to provide the statements, reports and other documents and materials as required, it shall Article 47 Where a banking financial institution is in violation of the laws, administrative regulations and the relevant regulation of the state (1) To order the banking financial institution to give a disciplinary sanction to the direct liable directors, senior managerial personnel (2) If the offences of the banking financial institution constitute no crime, the direct liable directors, senior managerial personnel (3) To disqualify the direct liable directors, senior managerial personnel from taking the positions for a certain time period to even Chapter VI. Supplementary Provisions Article 48 Where it is otherwise provided for the supervision over the policy banks and financial assets management companies established within Article 49 Where it is otherwise provided for the supervision over the foreign-funded banking financial institutions, the Sino-foreign joint Article 50 The present Measures shall be implemented as of February 1, 2004. |
The Standing Committee of the National People’s Congress
2003-12-27