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Guiding Opinions of China Banking Regulatory Commission for Commercial Banks on Improving and Intensifying Financial Services to Hi-tech
Enterprises
Yin Jian Fa [2006] No. 94
December 28, 2006
Each banking regulatory bureau, policy bank, state-owned commercial bank, joint stock commercial bank, financial asset management
corporation, China Postal Savings and Remittance Bureau, trust corporation, financial corporation and financial lease corporation
under direct supervision of China Banking Regulatory Commission:
For the purpose of implementing some auxiliary policies of the “National Outlines for Medium and Long-term Planning for Scientific
and Technological Development (2006-2020)”, creating financial environment for supporting and encouraging independent innovations,
guiding commercial banks to improve and intensify the provision of financial services to hi-tech enterprise and according to the
relevant state laws and regulations, China Banking Regulatory Commission hereby bring forward guiding opinions as follows.
Article 1
Commercial banks as mentioned in these Opinions cover state-owned commercial banks, joint stock commercial banks, urban commercial
banks, rural commercial banks, rural cooperative banks and rural credit cooperatives. Other banking financial institutions but policy
banks may be governed by these Opinions by analogy.
Hi-tech enterprises as mentioned in these Opinions refer to the enterprises recognized by the Ministry of Science and Technology or
the administrative department of science and technology under any province, autonomous region, municipality directly under the Central
Government, or city specifically designated in the state plan in accordance with the “Conditions and Measures for Recognizing Hi-tech
Enterprises inside National Hi-tech Industry Development Areas” ( Guo Ke Fa Huo Zi [2000] No. 324), the “Conditions and Measures
for Recognizing Hi-tech Enterprises outside National Hi-tech Industry Development Areas” (Guo Ke Fa Huo Zi [1996] No. 018) and the
“Circular on Related Implementation Provisions on Recognizing Hi-tech Enterprises outside National Hi-tech Industry Development Areas”
(Guo Ke Fa Huo Zi [2000] No. 120).
Article 2
Commercial banks shall set up the awareness that finance services technologies, shall follow the principles of operating business
independently, assuming profits and losses by themselves, bearing risks by itself, and aiming at market, propel the enhancement of
independent innovation abilities and the development of technological industries, and realize the commercial sustainable development
of financial services to hi-tech enterprises.
Article 3
Commercial banks shall, in light of the characters of the financial demands of hi-tech enterprises, perfect work procedures, internal
control and risk management, as well as improve and reinforce the provision of services to hi-tech enterprises.
Article 4
Commercial banks shall further reinforce and improve the provision of services to the following hi-tech enterprises, as well as actively
provide credit supports thereto in accordance with national policies on industrial and investment:
(1)
the enterprises undertaking the development tasks of Key Areas and Prior Themes, Main Special Projects or Advanced Technologies that
are ascertained in the National Outlines for Medium and Long-term Planning for Scientific and Technological Development (2006-2020);
(2)
the enterprises undertaking hi-tech projects that are initiated by the State or provinces upon approval of the related State authorities,
having independent intellectual properties, promising to become hi-tech achievements conversion projects in newly emerging industries,
as well as having highly merchandised and industrialized scientific and technological achievements;
(3)
the enterprises in high-tech content, high value-added or high-growth industries in the areas of electronics and information (especially
software and integrate circuits), modern agriculture (especially projects of industrialization of science and technology in agriculture
as well as technological extension projects of institutes of agricultural scientific research), biological engineering, new medicines,
new materials and their application , advanced manufacturing, aviation, spaceflight, new energy and energy conservation with high
efficiency, environmental protection, marine engineering, nuclear application technologies and so on;
(4)
the enterprises whose products and technologies are cutting-edge domestically, possessing good domestic and foreign market foreground,
strong market competitive capability, high economic and social benefits, as well as good credit; and
(5)
the small-scale scientific and technological enterprises complying with the state industrial policies, having high technological content,
strong creativity, growing well, and possessing a good foreground in industrial development, especially the small scientific and
technological enterprises that engage in researching, developing or applying new technologies or new techniques within national hi-tech
industry development areas, or out of hi-tech development areas but have been ascertained by the administrative department of science
and technology at or above the provincial level.
Article 5
Where a hi-tech enterprise is to be intended to be granted credit by a commercial bank, it shall concurrently satisfy the conditions
as follows:
(1)
It satisfies the related requirements in the related laws, regulations, industrial policies of the state, the state planning for key
industries, and the National Outlines for Medium and Long-term Planning for Scientific and Technological Development (2006-2020),
etc.;
(2)
With respect to a project approved by the state, its capital, land occupation standard, environmental protection, energy consumption,
production safety, etc. satisfy the related requirements;
(3)
The belongingness of its intellectual properties is clear, and it is not involved in any major intellectual property dispute;
(4)
Its property rights have been clearly defined, it has established a good corporate governance structure, normative internal management
system and sound accounting management system, its management staff have strong market expansion abilities , high management ability,
and sustainable innovation awareness, and it has strong repayment and risk-resisting abilities; and
(5)
It satisfies the existing requirements of commercial banks on credit granting system , internal control and risk management, as well
as other requirements as deemed necessary by commercial banks.
Article 6
A commercial bank shall make necessary market subdivision of hi-tech enterprises, and shall, with respect to the characters of the
hi-tech enterprises in different industries and at different development phases, actively conduct innovations in systems and products,
develop financial products and work procedures satisfying the demands of hi-tech enterprises, and provide various services in terms
of credit granting, settlement of funds, settlement and sale of foreign exchange, bank cards, cash management, financial consulting
and so on .
Article 7
Commercial banks shall, in accordance with the principles of credit, give priorities to arranging and mainly support the repayable
current fund loans that have optimistic returns and are needed for exporting independent innovation products. As regards the enterprises
that have good credit standing and export independent innovations products, commercial banks may ratify a certain credit limit, and
may, within such a credit limit, promptly provide various financial services according to the requirements on managing credit and
settlement.
Article 8
Commercial banks shall establish stable relationships with small scientific and technological enterprises, improve the financial
services to small enterprises for scientific and technological innovations, and focus on supporting those with strong innovation
abilities. They shall, according to the Guiding Opinions on the Small Enterprise Loan Business of Banks (Yin Jian Fa [2005] No. 54)
as formulated by China Banking Regulatory Commission, intensify the credit supports to small scientific and technological enterprises.
Article 9
Commercial banks shall determine a reasonable credit granting period and the method of repayment in light of the hi-tech enterprises’
demands for financing and their cash flow characters, and may adopt various methods of repayment such as repayment of fixed amounts
by installments, repayment of interest along with the principal, flexibly attaching necessary grace period (within which only interest
except principal is repaid) and so on .
Article 10
Commercial banks shall probe into and develop various forms of guaranty for granting credit to hi-tech enterprises, such as export
tax refund pledge, stock pledge , stock right pledge, insurance policy pledge, bond pledge, warehouse certificate pledge, and mortgage
(pledge) of other equities, etc. As regards the hi-tech enterprises owning independent intellectual properties and having passed
the evaluation of state authority, the loans may be granted with intellectual property as pledge. Besides the mortgage and pledge
of assets, commercial banks shall intensify the cooperation with special guaranty institutions, and accept the third party guaranty
of the special guaranty institutions.
For a small-scale scientific and technological enterprise to which credit is granted, the borrower may provide enterprise assets,
personal properties of owners or major shareholders as qualified mortgage, pledge and suretyship, and adopt the guaranty method combining
mortgage, pledge and suretyship to satisfy its demands for loans.
Article 11
Commercial banks shall actively intensify their communications with government departments, acquire related information in a timely
manner, and shall actively provide credit supports to the enterprises which are supported by the state’s fiscal subsidy of interest,
or are supported by the technical innovation fund for small-scale scientific and technological enterprises, or are guaranteed by
special guaranty institutions invested by government.
Article 12
Commercial banks shall correctly grasp the lifecycle and growth characters of hi-tech enterprises, and shall timely adjust the business
strategies, standards for access and withdrawal, and the credit structure in accordance with the maturity of the enterprise technologies
as well as the characters of financial demands and risk situation of the enterprises in the industrialization stage, market-based
development stage and growth stage.
Article 13
Commercial banks shall strengthen the credit granting management of hi-tech enterprises in light of the requirements the Guidelines
on Commercial Banks’ Due Diligence in the Credit Granting Work (Yin Jian Fa [2004] No. 51) and the Guidelines on Commercial Banks’
Due Diligence in the Credit Granting to Small Enterprises (for Trial Implementation)” (Yin Jian Fa [2006] No. 69), both of which
are formulated by China Banking Regulatory Commission.
Article 14
Commercial banks shall reinforce their abilities of recognizing and evaluating hi-techs and independent intellectual properties as
well as the development directions and market foregrounds thereof, and may adopt the external expert appraisal mechanism when necessary,
or, when so required, entrust experts in related areas to check and appraise the technologies, products, market, laws and policies
, etc.
Article 15
Commercial banks shall adopt risk pricing mechanisms for loans for the sake of providing hi-tech enterprises with credit supports,
and may, within a scope permitted by laws, regulations and policies, independently determine the loan interest rates by taking into
account such factors as the risk level, costs of raising funds, management costs, target earnings from loans, requirement for return
of capital, local market interest rate and so on, and may apply different interest rates to borrowers under different conditions.
Article 16
Commercial banks shall reinforce their cooperation with other banking financial institutions, and may, as regards hi-tech projects
in great demand for financing, organize syndication loans so as to realize benefit and risk sharing or by other means.
Article 17
Commercial banks shall conduct effective post-credit-granting management, focus on the development trend of hi-techs, find out the
potential risks of the hi-tech enterprises to which credit is granted in a timely manner, and pre-remind risk. If any major event
that affects customers’ capacity of performing contracts occurs, they shallpromptly take necessary measures, and decide on whether
to adjust the granting credit in accordance with the situations.
Article 18
Commercial banks shall reinforce the classification management for risk of the loans that are granted to hi-tech enterprises, and
shall according to the Measures for Administering the Withdrawal of Reserves for Non-performing Debts by Financial Enterprises” (Cai
Jin [2005] No. 49), fully draw reserves, reinforce the risk-preventing ability , and make up loan losses.
Each banking regulatory bureau is asked to forward these Opinions to each banking regulatory branch bureau, urban commercial bank,
urban credit cooperative, rural commercial bank, rural cooperative bank and rural credit cooperative within its respective jurisdiction.
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