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China Banking Regulatory Commission
Order of China Banking Regulatory Commission
No. 3
The “Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative
Financial Institutions”, which were adopted at the 40th chairman’s meeting of China Banking Regulatory Commission on November 10,
2005, are hereby promulgated, and shall come into force on February 1, 2006.
Chairman Liu Mingkang
January 12, 2006
Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative
Financial Institutions
Chapter I General Provisions
Article 1
The present measures are formulated in accordance with the “Law of the People’s Republic of China on the Regulation of the Banking
Industry”, the “Administrative License Law of the People’s Republic of China”, the “Law of the People’s Republic of China on Commercial
Banks” as well as other laws, administrative regulations, and the relevant decisions of the State Council for the purpose of regulating
China Banking Regulatory Commission (hereinafter referred to as CBRC) and its dispatched offices in their granting administrative
licenses to cooperative financial institutions, clarifying the administrative licensing matters, conditions, applicable operational
flows and term, and protecting the lawful rights and interests of the applicants.
Article 2
Cooperative financial institutions as mentioned in the present measures shall include: rural credit cooperatives, associate rural
credit cooperative unions of the counties (cities, districts), rural credit cooperative unions of the counties (cities, districts),
associate rural credit cooperative unions of the prefectures (cities), associate rural credit cooperative unions of the provinces
(autonomous regions, municipalities directly under the Central Government), rural cooperative banks, and rural commercial banks.
Article 3
CBRC and its dispatched offices shall comply with the present measures and the “Provisions of China Banking Regulatory Commission
on the Procedures for Granting Administrative Licenses” when granting administrative licenses to cooperative financial institutions.
Article 4
The following matters of a cooperative financial institution shall be subject to administrative license of CBRC or its dispatched
office: establishment, modification or termination of the institution, adjustment of the business scope, addition of new varieties
of business, qualifications for holding the positions of council members (directors) and senior managers, and so on.
Article 5
An applicant shall submit the application materials in accordance with the “Catalogue of China Banking Regulatory Commission on Application
Materials for Administrative Licensing Matters and the Format Requirements”.
Chapter II Establishment of Legal Person Institutions
Section 1 Establishment of Rural Credit Cooperatives
Article 6
For the establishment of a rural credit cooperative, the applicant shall meet the following conditions:
(1)
It has the articles of association conforming to the provisions of CBRC;
(2)
It is established by means of initiation and there shall be no less than 500 initiators;
(3)
The minimum amount of registered capital shall be RMB 1 million Yuan, which shall be paid-in capital;
(4)
It has council members and senior managers who meet the qualification conditions for holding their respective positions;
(5)
There are no less than 2 persons who hold the positions of director general and vice director general(s);
(6)
No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma
or above majoring in finance or similar field;
(7)
It has a sound organizational structure and management rules; and
(8)
It has qualified business place, safety protection measures and other relevant facilities for its business.
Article 7
For the establishment of a rural credit cooperative, the applicant shall meet the following conditions on prudence in addition:
(1)
It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;
(2)
It has scientific and effective human resources management rules, and has professional talents with high qualities;
(3)
It has an effective capital restraint and supplement mechanism;
(4)
It contain no shares held by the local people’s government in the form of fiscal funds; and
(5)
Other conditions on prudence as prescribed by CBRC.
Article 8
For the establishment of a rural credit cooperative, there shall be qualified initiators. Such initiators may include: natural persons,
domestic non-financial institutions, domestic financial institutions, overseas financial institutions and other initiators acknowledged
by CBRC.
The expression “overseas financial institutions” as mentioned in the preceding paragraph shall include the financial institutions
from Hong Kong, Macao and Taiwan regions.
Article 9
A natural person initiator shall meet the following conditions:
(1)
He has full capacity for civil conduct;
(2)
He has good social prestige as well as honesty and credibility records;
(3)
His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing
funds commissioned by others;
(4)
He is a resident of the locality of the rural credit cooperative to be established, or a non-local resident who has a fixed domicile
at the said locality and has resided for at least 3 years; and
(5)
Other conditions on prudence as prescribed by CBRC.
Article 10
The proportion of the shares of a single natural person shall not exceed 2%, and the proportion of the total shares of employees shall
not exceed 25%.
Article 11
As an initiator, a domestic non-financial institution shall meet the following conditions:
(1)
It has been registered in the administrative department for industry and commerce, and has the status as a legal person;
(2)
It has good social prestige, honesty and credibility records, as well as tax payment records;
(3)
It is in good financial situation, and made profits continuously in the latest 2 accounting years;
(4)
It has strong management capabilities and fund strength;
(5)
After the year-end distribution of profits, its net assets reach 30% of the total assets or even higher (by standard of consolidated
accounting statements);
(6)
The balance of its equity investments shall generally not exceed 50% of its net assets (including the amount of current investments,
by standard of consolidated accounting statements);
(7)
His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing
funds commissioned by others;
(8)
Its place of registration is within the jurisdiction of the rural credit cooperative to be established; and
(9)
Other conditions on prudence as prescribed by CBRC.
Article 12
The proportion of the total shares of a single domestic non-financial institution and its associated parties shall not exceed 10%.
Article 13
As an initiator, a domestic financial institution shall meet the following conditions:
(1)
Its capital adequacy ratio shall not be lower than 8% if it is a bank, and the total amount of its capital shall not be lower than
10% of the total amount of its risk-weighted assets if it is a non-bank financial institution;
(2)
The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments, by standard
of consolidated accounting statements);
(3)
It made profits continuously in the latest 2 accounting years;
(4)
It has good corporate governance, as well as sound and effective internal control rules;
(5)
Its main prudent regulatory indices meet the regulatory requirements; and
(6)
Other conditions on prudence as prescribed by CBRC.
None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central
Government), associate rural credit cooperative unions of the prefectures (cities), or associate rural credit cooperative unions
of the counties (cities, districts) may hold shares of a rural credit cooperative.
Article 14
The proportion of the total shares of a single domestic financial institution and its associated parties shall not exceed 20%.
Article 15
As an initiator, an overseas financial institution shall meet the following conditions:
(1)
Its total year-end assets in the latest year shall generally be no less than 1,000 million USD;
(2)
If it is an international rating institution acknowledged by CBRC, its long-term credit was rated by CBRC as good in the latest 2
years;
(3)
It has been keeping a favorable balance in the latest 2 accounting years;
(4)
Its capital adequacy ratio shall reach the average level of capital adequacy ratio for the banking sector at the place of its registration
and shall not be lower than 8% if it is a bank, or the total amount of its capital shall not be lower than 10% of the total amount
of risk-weighted assets if it is a non-bank financial institution;
(5)
It has sound internal control rules;
(6)
The financial institution at the place of registration has sound supervision and management rules;
(7)
Its home country (region) is in good economic situation; and
(8)
Other conditions on prudence as prescribed by CBRC.
CBRC may, when required by the risk situation of the financial industry and the supervision thereof, adjust the conditions for overseas
financial institutions to hold the shares.
Article 16
The proportion of the shares held by a single overseas financial institution in a single rural credit cooperative shall not exceed
20%. The proportion of the total shares of more than one overseas financial institution shall not exceed 25%.
The expression “proportion of the shares” as mentioned in the preceding paragraph shall refer to the proportion of the total shares
held by an overseas financial institution in a rural credit cooperative. The proportion of shares held by an associated party of
the overseas financial institution shall be counted into that of the overseas financial institution.
Article 17
The establishment of a rural credit cooperative shall include two stages, namely, preparatory establishment and initiation of the
business.
For the establishment of a rural credit cooperative, a preparatory establishment team shall be formed, and the initiators of the rural
credit cooperative shall entrust the preparatory establishment team as the applicant.
Article 18
The application for preparatory establishment of a rural credit cooperative within the jurisdiction of a banking regulatory branch
office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory branch office) shall be subject to the
acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the supervisory
office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory office) for decision. The banking regulatory
office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.
The application for the preparatory establishment of a rural credit cooperative within the jurisdiction of the city where the banking
regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The
banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.
Article 19
The term of preparatory establishment of a rural credit cooperative shall be 6 months as of the day when the decision on approval
is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory
establishment, submit the application for postponing the preparatory establishment to the banking regulatory office. The banking
regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement
or not, and the maximum period postponed for preparatory establishment shall be 3 months.
The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation
of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory
establishment, and take back the approval document for preparatory establishment.
Article 20
The application of a rural credit cooperative within the jurisdiction of a banking regulatory branch office for the initiation of
business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject
to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt
of the entire application materials, make a written decision on ratification or refusal.
The application of a rural credit cooperative within the jurisdiction of the city where the banking regulatory office is located for
the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The
banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.
Article 21
A rural credit cooperative shall, after receiving the ratification document for the initiation of business and obtaining a financial
business permit, go to the administrative department for industry and commerce to apply for a business license.
A rural credit cooperative shall initiate the business within 6 months as of obtaining the business license. In the case of any particular
circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit the
application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within
20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum
period postponed for the initiation of business shall be 3 months.
Where a rural credit cooperative fails to initiate the business within the time limit as prescribed in the preceding paragraph, the
deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of
business and the financial business permit, and make an announcement.
Section 2 Establishment of Rural Associate Credit Cooperative Unions of Counties (Cities, Districts)
Article 22
For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following
conditions:
(1)
It has the articles of association conforming to the provisions of CBRC;
(2)
The associate union is established by means of initiation and there are no less than 8 rural credit cooperatives within the jurisdiction;
(3)
The minimum amount of its registered capital is RMB 1 million Yuan, which shall be paid-in capital;
(4)
It has council members and senior managers who meet the qualification conditions for holding their respective positions;
(5)
There are no less than 2 persons who hold the positions of director general and vice director general(s);
(6)
No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma
or above majoring in finance or similar field;
(7)
It has a sound organizational structure and management rules; and
(8)
It has qualified business place, safety protection measures and other relevant facilities for its business.
Article 23
For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following
conditions on prudence in addition:
(1)
It has a good corporate governance structure;
(2)
It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;
(3)
It has scientific and effective human resources management rules, and has professional talents with high qualities;
(4)
It has an effective capital restraint and supplement mechanism;
(5)
It contains no shares held by the local people’s government in the form of fiscal funds; and
(6)
Other conditions on prudence as prescribed by CBRC.
Article 24
For the establishment of an associate rural credit cooperative union of a county (city, district), there shall be qualified initiators,
and the initiators shall be rural credit cooperatives within the jurisdiction.
The employees of an associate rural credit cooperative union of a county (city, district) may hold shares by centralizing their funds.
None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central
Government), or associate rural credit cooperative unions of the prefectures (cities) shall hold shares of an associate rural credit
cooperative union of a county (city, district).
Article 25
As an initiator, a rural credit cooperative shall meet the following conditions:
(1)
The place of registration is located within the jurisdiction of the associate rural credit cooperative union of the county (city,
district) to be established;
(2)
The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments); and
(3)
Other conditions on prudence as prescribed by CBRC.
Article 26
A single rural credit cooperative shall hold no less than 50,000 shares, and the proportion of its shares shall not exceed 20%.
Article 27
Any of the employees of a shareholding associate rural credit cooperative union of a county (city, district) shall meet the following
conditions:
(1)
He has full capacity for civil conduct;
(2)
His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing
funds commissioned by others; and
(3)
Other conditions on prudence as prescribed by CBRC.
Article 28
The proportion of the shares of a single employee shall not exceed 2%, and the proportion of the total shares of all employees shall
not exceed 25%.
Article 29
The establishment of an associate rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory
establishment and initiation of the business.
For the establishment of an associate rural credit cooperative union of a county (city, district), a preparatory establishment team
shall be formed, and the initiators of the associate rural credit cooperative union of the county (city, district) shall entrust
the preparatory establishment team as the applicant.
Article 30
The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory
branch office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory
branch office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office
shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.
The application for preparatory establishment of an associate rural credit cooperative union of a county (city, district) within the
jurisdiction of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the
banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written
decision on approval or disapproval.
Article 31
The term of preparatory establishment of an associate rural credit cooperative union of a county (city, district) shall be 6 months
as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month
prior to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing
the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make
a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be
3 months.
The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation
of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory
establishment, and take back the approval document for the preparatory establishment.
Article 32
The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory
branch office for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory
branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall,
within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.
The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where
the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the
banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written
decision on ratification or refusal.
Article 33
An associate rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the
initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to
obtain a business license.
An associate rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining
a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time
limit for the initiation of business, submit an application for postponing the initiation of business to the banking regulatory office.
The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve
the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.
Where the associate rural credit cooperative union of the county (city, district) fails to initiate the business within the time limit
as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back
the ratification document for the initiation of the business and the financial business permit, and make an announcement.
Section 3 Establishment of Rural Credit Cooperatives of Counties (Cities, Districts)
Article 34
For the establishment of a rural credit cooperative of a county (city, district), the applicant shall meet the following conditions:
(1)
It has the articles of association conforming to the provisions of CBRC;
(2)
It is established by means of initiation and there shall be no less than 1,000 initiators;
(3)
Its registered capital shall be RMB 10 million Yuan or more;
(4)
It has council members and senior managers who meet the qualification conditions for holding their respective positions;
(5)
There are no less than 2 persons who hold the positions of director general and vice director general(s);
(6)
No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma
or above majoring in finance or similar field;
(7)
It has a sound organizational structure and management rules; and
(8)
It has qualified business place, safety protection measures and other relevant facilities for its business.
The banking regulatory office may, in light of the actual situation of the locality of the rural credit cooperative union of the county
(city, district) to be established, make a proper adjustment to the registered capital in Item (3) of the preceding paragraph, provided
that the amount of registered capital shall not be less than RMB 5 million Yuan.
Article 35
For the establishment of a rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions
on prudence in addition:
(1)
It has a good corporate governance structure;
(2)
It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;
(3)
It has scientific and effective human resources management rules, and has professional talents with high qualities;
(4)
It has an effective capital restraint and supplement mechanism;
(5)
It contains no shares held by the local people’s government in the form of fiscal funds; and
(6)
Other conditions on prudence as prescribed by CBRC.
For the establishment of a rural credit cooperative union of a county (city, district) by means of consolidation, the applicant shall
meanwhile meet the following conditions in addition:
(1)
Both the rural credit cooperative and the associate rural credit cooperative union of the county (city, district) participate in the
establishment voluntarily;
(2)
The associate rural credit cooperative union of the a county (city, district) has strong management capabilities;
(3)
The rural credit cooperative and the associate rural credit cooperative union of the county (city, district) make an estimation according
to consolidated financial statements, which shows that it is solvent;
(4)
Its core capital adequacy ratio shall be no lower than 2%, and may continue to be raised after establishment.
Article 36
For the establishment of a rural credit cooperative union of a county (city, district), there shall be qualified initiators. The initiators
may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions,
and other initiators acknowledged by CBRC.
Article 37
The initiators shall conform to the provisions in Article 9 and Articles 11 through 16 of the present measures.
The proportion of the shares of a single natural person shall not exceed 5the proportion of the total shares of the employees
shall not exceed 25%, and the proportion of the total shares of all natural persons shall be no less than 50%.
None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central
Government), or of the associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural credit
cooperative union of a county (city, district).
Article 38
The establishment of a rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment
and initiation of the business.
For the establishment of a rural credit cooperative union of a county (city, district), a preparatory establishment team shall be
formed, and the initiators of the rural credit cooperative union shall entrust the preparatory establishment team as the applicant.
Article 39
The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch
office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory branch
office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall,
within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.
The application for preparatory establishment of a rural credit cooperative union of a county (city, district) within the jurisdiction
of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the banking regulatory
office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval
or disapproval.
Article 40
The term of preparatory establishment of a rural credit cooperative union of a county (city, district) shall be 6 months as of the
day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior
to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing
the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make
a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be
3 months.
The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation
of business. If it fails to submit the application within the time limit, the deciding organ shall nullify th
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China Banking Regulatory Commission
Decree of China Banking Regulatory Commission
No. 2
The Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters on Chinese investment
Commercial Banks adopted at the 40th chairmen’s meeting of China Banking Regulatory Commission on November 10, 2005, are hereby promulgated
and shall enter into effect as of the day of February 1, 2006.
Chairman, Liu Mingkang
January 12, 2006
Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters on Chinese investment Commercial
Banks
Chapter I General Provisions
Article 1
In order to regulate the acts of China Banking Regulatory Commission (hereinafter referred to as the CBRC) and their dispatched offices
in implementing the administrative licensing on Chinese investment commercial banks, make clear the administrative licensing matters,
conditions, operational flows and terms, and protect the legitimate rights and interests of the applicants, according to the Banking
Supervision Law of the People’s Republic of China, the Administrative License Law of the People’s Republic of China, the Law of the
People’s Republic of China on Commercial Banks and other laws, administrative regulations and the relevant decisions of the State
Council, these Measures are formulated.
Article 2
The “Chinese investment commercial banks” mentioned in these Measures shall include the state-owned commercial banks, joint-equity
commercial banks, city commercial banks and urban credit cooperatives joint-equity limited companies, etc.
Article 3
In accordance with the Measures and the Provisions of China Banking Regulatory Commission on the Procedures for the Implementation
of Administrative Licensing, the CBRC and its dispatched offices shall bring into effect the administrative licenses to Chinese investment
commercial banks .
Article 4
The following matters about Chinese investment commercial banks shall be under the control of the administrative licensing of the
CBRC or its dispatched office: the establishment, modification or termination of the institution, the adjustment of the business
range, the addition of new varieties of business, and the qualifications for holding the positions of directors and senior managers,
etc.
Article 5
The applicant shall submit the application documents in the light of the Catalogue and Requirements for the Formats of the Application
Documents for the Administrative Licensing Matters of China Banking Regulatory Commission.
Chapter II Establishment of Institutions
Section I Establishment of Legal Person Institutions of Joint -equity Commercial Banks
Article 6
For the establishment of a legal person institution of a joint -equity commercial bank, an applicant shall meet the conditions as
follows:
(1)
Its articles of association shall accord with the Company Law of the People’s Republic of China (hereinafter referred to as the Company
Law) and the Law of the People’s Republic of China on Commercial Banks (hereinafter refers to as the Law on Commercial Banks);
(2)
Registered capital shall be paid-in registered capital and no less than one billion Yuan or equivalent convertible currency;
(3)
Directors and senior managers who meet the qualification conditions for holding their respective positions are needed as well as qualified
operational personnel familiar with the banking business;
(4)
Right organizational institutions and management systems; and
(5)
A business place, safety protection measures and other relevant facilities suitable for its business operations.
Article 7
For the establishment of a legal person institution of a joint -equity commercial bank, the applicant shall at least meet the following
prudent conditions in addition:
(1)
A good corporate governance structure;
(2)
A right risk management system, and effectively controlling the risks in associated transactions;
(3)
The local people’s government shall not become a shareholder, and not intervene in its daily business operations;
(4)
The qualified foreign institutional investors shall be included in the promoters and shareholders;
(5)
Having a scientific and effective human resources management system as well as professional talents with high qualities;
(6)
Having an effective capital restraint and supplement mechanism; and
(7)
Redounding to dissolve the risks of existing financial institutions and promoting financial stability.
Article 8
As the establishment of a joint -equity commercial bank, eligible promoters shall include such as domestic financial institutions,
overseas financial institutions, domestic non-financial institutions and other promoters recognized by the CBRC.
The “overseas financial institutions” mentioned in the preceding Paragraph shall involve the financial institutions in Hong Kong,
Macao and Taiwan.
Article 9
As a promoter of the legal person institution of a joint -equity commercial bank, a domestic financial institution shall meet the
conditions as follows:
(1)
The capital adequacy ratio of a commercial bank shall not be lower than 8%, and the total amount of capital of a non-bank financial
institution shall not be lower than 10% of the total amount of its risk-weighted assets;
(2)
The balance of its equity investments shall not exceed 50% of its net assets in general ( requirements of combined accounting statements);
(3)
Keeping a favorable balance in the latest 3 accounting years;
(4)
Having a good corporate governance structure, as well as a right and effective internal control system;
(5)
Its main prudent regulatory indices shall meet the regulatory requirements; and
(6)
Other prudent conditions prescribed by the CBRC.
Article 10
As a promoter or strategic investor of the legal person institution of a joint -equity commercial bank, an overseas financial institution
shall meet the conditions as follows:
(1)
In the latest year, its total year-end assets shall be no less than 10 billion US Dollars in general;
(2)
In the latest 2 years, it shall have been appraised as good for its long-term credit by an international rating institution recognized
by the CBRC;
(3)
Keeping a favorable balance in the latest 2 accounting years;
(4)
Its capital adequacy ratio shall reach the average level of capital adequacy ratio for the banking industry at the place of its registration
and shall not be lower than 8%; or the total amount of capital of a non-bank financial institution shall not be lower than 10% of
the total amount of risk-weighted assets is;
(5)
Having a right internal control system;
(6)
The place of its registration shall have a right supervision and management system for the financial institution;
(7)
The country (region), which it is in, shall be in a good economic situation; and
(8)
Other prudent conditions prescribed by the CBRC.
As a promoter or strategic investor of the legal person institution of a joint -equity commercial bank, the overseas financial institution
shall follow the principles of holding shares on the long-term basis, optimizing governance, business cooperation, and competition
withdrawal.
In light of the risk situation of the financial industry and the requirements for the supervision thereof, the CBRC may adjust the
conditions for overseas financial institutions as the promoters prescribed in the preceding Paragraph.
Article 11
The proportion of the shares of a single overseas financial institution as the promoter or strategic investor when investing to a
single Chinese investment commercial bank shall not be more than 20%, and the proportion of the total shares of several overseas
financial institutions as the promoters or strategic investors shall not be more than 25%.
The “proportion of the shares” mentioned in the preceding Paragraph refers to the proportion of the shares held by overseas financial
institutions in the total amount of shares of a Chinese investment commercial bank. The proportion of the shares held by the associated
parties to overseas financial institutions shall be computed together with the overseas financial institutions.
Article 12
As a promoter of the legal person institution of a joint -equity commercial bank, a domestic non-financial institution shall meet
the conditions as follows:
(1)
Having registered at the administrative department for industry and commerce, and owning the legal person qualification;
(2)
Having a good corporate governance structure or an effective organizational management model;
(3)
Having a good social reputation as well as good credit and tax payment records, and repaying the principal and interests of the loans
it owes to the financial institutions on time and in full amount;
(4)
Having a longer period of development and a steady business operational situation;
(5)
Having a stronger management capacity as well as good capital strength;
(6)
Having a good financial situation and having been in a favorable balance in the latest 3 accounting years;
(7)
After the year-end distribution, having the net assets that account for 30% of its total assets (requirements of combined accounting
statements);
(8)
The balance of equity investments shall not be more than 50% of the net assets of the enterprise in general (requirements of combined
accounting statements) except for the investment companies or holding companies prescribed by the State Council;
(9)
Capital sources for buying shares are true and lawful; and
(10)
Other prudent conditions prescribed by the CBRC.
Article 13
An enterprise shall not be a promoter of the legal person institution of a joint -equity commercial bank in any of the circumstances
as follows:
(1)
Having obvious defects in the corporate governance structure or mechanism;
(2)
Having a large number of associated enterprises, complex and obscure in equity relationships, or frequent and abnormal in associated
exchanges;
(3)
Not having a prominent major business, and covering too many industries in its business scope;
(4)
The flow fluctuation of cash is largely influenced by the economic situation;
(5)
The ratio of liabilities or the ratio of financial leverage is higher than the average industry ratio ; and
(6)
Other circumstances that will create significant disadvantage effects to the bank.
Article 14
The establishment of the legal person institution of a joint -equity commercial bank shall include two phases, namely, preparatory
establishment and beginning of business.
Article 15
An application for the preparatory establishment of the legal person institution of a joint -equity commercial bank shall jointly
be submitted to the CBRC by all the promoters for acceptance, examination and decision. The CBRC shall make a written decision on
approval or disapproval within 4 months upon acceptance of the application.
Article 16
The period of preparatory establishment of the legal person institution of a joint -equity commercial bank shall be 6 months as of
the day of the approval decision made. If the preparatory establishment has not been carried out on time, the institution shall submit
an application for postponing the preparatory establishment to the CBRC within 1 month prior to the expiry of the time limit for
preparatory establishment. The CBRC shall make a decision on whether to approve the postponement or not within 20 days as of the
day of receipt of the written application. And the longest period postponed for preparatory establishment shall be 3 months.
Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution
shall submit an application for the beginning of business. If it fails to submit the application within the time limit, the approval
document for preparatory establishment shall be abated and the decision-making organ shall logout the license for preparatory establishment.
Article 17
An application of the legal person institution of a joint -equity commercial bank for the beginning of business shall be submitted
to the CBRC for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 20
days after acceptance of the application,.
Article 18
After receiving the ratification documents for the beginning of business and obtaining a financial business permit, the legal person
institution of a joint -equity commercial bank shall register at the administrative department for industry and commerce and obtain
a business license.
The legal person institution of a joint -equity commercial bank shall open up its business within 6 months after obtaining the business
license. If it fails to initiate its business within the time limit, the institution shall submit an application for postponing the
beginning of business within 1 month before the expiry of the time limit for the beginning of business, to the CBRC. The CBRC shall
make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application,
and the longest period postponed for the beginning of business shall be 3 months.
If the legal person institution of a joint -equity commercial bank fails to open up its business within the time limit prescribed
in the preceding Paragraph, the ratification documents for the beginning of business shall be abated, and the decision-making organ
shall logout the license for the beginning of business, take back the financial business permit, and make an announcement.
Section II Establishment of Legal Person Institutions of City Commercial Banks
Article 19
The city commercial bank shall be established in a city at or above the prefecture level and meet the conditions as follows:
(1)
Having the articles of association in the light of the Company Law and the Law on Commercial Banks;
(2)
The registered capital shall be no less than 1000 million Yuan and have been paid in, its capital adequacy ratio shall not be lower
than 8%, and its core capital adequacy ratio shall not be lower than 4%;
(3)
The proportion of its badly performing loans shall be no higher than 10%;
(4)
Having senior managers who meet the qualification for holding the positions as well as qualified operational personnel familiar with
the banking business;
(5)
Having a right and effective corporate governance structure and internal control system; and
(6)
The business place, safety protection measures and other relevant facilities suitable for its business operations.
Article 20
An application for establishing the legal person institution of a city commercial bank shall be filed by an urban credit cooperatives
joint–equity limited company after combination and reorganization, and it shall meet the conditions as follows:
(1)
The capital adequacy ratio shall not be lower than 6%, and the core capital adequacy ratio shall not be lower than 3%;
(2)
The proportion of its badly performing loans shall be no higher than 15%, and the total amount of its assets shall be no less than
1.5 billion Yuan;
(3)
Having a good corporate governance structure;
(4)
Having right and effective risk management and internal control systems, and having no serious cases occurred in the latest two years;
(5)
Having a good financial situation and strong profit-making ability. The shareholders’ equities of the former urban credit cooperative
shall be first written off due to its accumulated losses, and the insufficient part shall be complemented by the former shareholders
or the local government in cash. Its per capita assets shall be no less than 6 million Yuan (or 5 million Yuan for an undeveloped
area). The rate of its year-end asset expenses in the latest year before the application is submitted shall be lower than 1.35% in
general, and the rate of its asset profits shall not be lower than 0.2% in general, and the rate of its capital profits shall not
be higher than 8% (the premise for the calculation of profits shall be the sufficient reserves for the losses incurred from all kinds
of loans in that year), and the rate of interests reclaim shall not be lower than 80%;
(6)
Its liquidity ratio, ration of deposits and loans, ration of provisions and other indices shall meet the relevant supervisory requirements;
and
(7)
Having withdrawn sufficient reserves for losses.
Article 21
Establishing a city commercial bank; there shall be eligible promoters that may include: domestic financial institutions, domestic
non-financial institutions, overseas financial institutions and other promoters as recognized by the CBRC. A promoter shall follow
the conditions prescribed in Articles 9 through 13 of these Measures.
Article 22
The establishment of the juridical person institution of a city commercial bank shall include two stages, namely, preparatory establishment
and beginning of the business.
Article 23
An application for the preparatory establishment of the legal person institution of a city commercial bank shall be followed with
the acceptance and preliminary examination of the banking regulatory bureau at the locality where the commercial bank is to be established,
and the examination and decision shall be made by the CBRC. The CBRC shall make a written decision on approval or disapproval within
4 months upon receipt of the entire application documents.
Article 24
The period of preparatory establishment of the legal person institution of a city commercial bank shall be 6 months as of the day
when the decision on approval is made. If the preparatory establishment has not been implemented on time, within 1 month prior to
the expiry of the time limit for preparatory establishment, an application for postponing the preparatory establishment shall be
submitted by the institution to the banking regulatory bureau. The banking regulatory bureau shall make a decision on whether to
approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed
for preparatory establishment shall be 3 months.
Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution
shall submit an application for the opening of business. If the application fails to be submitted within the time limit, the approval
documents for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.
Article 25
An application of the legal person institution of a joint -equity commercial bank for the beginning of its business shall be submitted
to the local banking regulatory bureau for acceptance, examination and decision. The banking regulatory bureau shall make a written
decision on approval or disapproval within 2 months after acceptance of the application, and send a copy to the CBRC.
Article 26
After receiving the ratification document for the beginning of business and obtaining a financial business permit, the legal person
institution of a city commercial bank shall register at the administrative department for industry and commerce and obtain a business
license.
The legal person institution of a city commercial bank shall open up its business within 6 months after obtaining the business license.
If the institution fails to open up its business within the time limit, it shall submit an application for postponing the beginning
of business to the CBRC within 1 month prior to the expiry of the time limit for the beginning of business. The CBRC shall make a
decision on whether to approve the postponement or not within 20 days as of receipt of the written application, and the longest period
postponed for the beginning of business shall be 3 months.
If the legal person institution of a city commercial bank fails to open up its business within the time limit prescribed in the preceding
Paragraph, the ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the
license for the beginning of business, take back the financial business permit and make an announcement.
Section III Establishment of Urban Credit Cooperatives Joint–equity Limited Companies
Article 27
The “establishment of an urban credit cooperatives joint–equity limited company” means that, on the basis of willingness and in the
light of the Company Law, an enterprise legal person which is established upon reorganization and merge of several or one city credit
cooperative(s) within a same city , absorbs public savings, grants loans and handles settlement businesses. This enterprise legal
person shall be a local banking financial institution in the form of joint–equity limited company.
Article 28
For the establishment of an urban credit cooperative joint–equity limited company, the applicant shall meet the conditions as follows:
(1)
Having the articles of association in the light of the Company Law and the Law on Commercial Banks;
(2)
The registered capital shall be no less than 50 million Yuan, which has been paid in, its capital adequacy ratio shall not be lower
than 8%, and its core capital adequacy ratio shall not be lower than 4%;
(3)
The proportion of its badly performing loans shall be no higher than 15%;
(4)
Having senior managers who own the qualification for holding their respective positions as well as qualified operational personnel
familiar with the banking business;
(5)
Having right organizational institutions and management systems; and
(6)
Having business place, safety protection measures and other relevant facilities suitable for its business operations; and
(7)
Other prudent conditions prescribed by the CBRC.
Article 29
All the urban credit cooperatives that participate in the establishment of an urban credit cooperatives joint–equity limited company
shall be subject to the consolidated calculation of financial statements, and shall meet the conditions as follows:
(1)
The capital adequacy ratio shall not be lower than 6%, and the core capital adequacy ratio shall not be lower than 3%;
(2)
The quality situation of asset shall be good, and the proportion of badly performing loans shall be no higher than 18%;
(3)
The situation of profit-making shall be good. The per capita assets shall not be lower than 5 million Yuan. The rate of year-end asset
profits for the latest year before the application is submitted shall not be lower than 0.2% in general, the rate of capital profits
shall not be lower than 4% in general, and the rate of interests recovery not higher than 80%; and
(4)
Having a good liquidity situation. And the liquidity ratio, ration of deposits and loans, ration of provisions and other indices shall
meet the relevant supervisory requirements.
Each urban credit cooperative shall also meet other prudent conditions prescribed by the CBRC.
Article 30
The shareholders of the urban credit cooperative that has participated in the establishment of an urban credit cooperatives joint–equity
limited company may be as the promoters of the urban credit cooperatives joint–equity limited company.
For the establishment of an urban credit cooperative joint–equity limited company, the promoters may also be the domestic financial
institutions, domestic non-financial institutions, overseas financial institutions and other promoters recognized by the CBRC. The
aforesaid promoters shall meet the conditions prescribed in Articles 9 through 13 of these Measures, but the total year-end assets
of an overseas financial institution for the latest year shall not be less than one billion US Dollars in general.
Article 31
The establishment of an urban credit cooperatives joint–equity limited company shall include two stages, namely, preparatory establishment
and beginning of the business.
Article 32
An application for the preparatory establishment of an urban credit cooperatives joint–equity limited company shall be subject to
the acceptance and preliminary examination of the local banking regulatory bureau, and the examination and decision shall be made
by the CBRC. The banking regulatory bureau shall seek for the supervisory opinions of the banking regulatory sub-bureau at the locality
where the urban credit cooperatives joint–equity limited company is to be established. The CBRC shall make a written decision on
approval or disapproval within 4 months after receipt of the entire application documents.
Article 33
The period of preparatory establishment of an urban credit cooperative joint–equity limited company shall be 6 months as of the day
when the decision on approval is made. If the preparatory establishment has not been implemented on time, the institution shall submit
an application for postponing the preparatory establishment to the banking regulatory bureau within 1 month prior to the expiry of
the time limit for preparatory establishment. The banking regulatory bureau shall make a decision on whether to approve or disapprove
within 20 days as of receipt of the written application, and the longest period postponed for preparatory establishment shall be
3 months.
Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution
shall submit an application for the beginning of business. If an application fails to be submitted within the time limit, the approval
document for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.
Article 34
An application of an urban credit cooperatives joint–equity limited company for the beginning of its business shall be submitted
to the local banking regulatory bureau for acceptance and decision. The banking regulatory bureau shall make a written decision on
approval or disapproval within 2 months upon acceptance of the application, and send a copy to the local banking regulatory sub-bureau.
Article 35
After receiving the ratification documents for the beginning of business and obtaining a financial business permit, an urban credit
cooperatives joint–equity limited company shall register at the administrative department for industry and commerce and obtain a
business license.
Within 6 months after obtaining the business license, the urban credit cooperatives joint–equity limited company shall open up its
business. If the institution fails to open up its business within the time limit, the applicant shall submit an application for postponing
the beginning of business to the banking regulatory bureau within 1 month prior to the expiry of the time limit for the beginning
of business. The banking regulatory bureau shall make a decision on whether to approve the postponement or not within 20 days as
of the day of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.
If the urban credit cooperatives joint–equity limited company fails to open up its business within the time limit as prescribed in
the preceding Paragraph, the original ratification documents for the beginning of business shall be abated, and the decision-making
organ shall logout the license for the beginning of business, take back the financial business permit and make an announcement.
Section IV Establishment of Domestic Branches
Article 36
The domestic branches established by Chinese investment commercial banks shall include the branches, branch-level exclusive institutions,
sub-branches and facilities of self-service banks, etc.
Article 37
If a state-owned commercial bank or joint -equity commercial bank applies for establishing a branch, the applicant shall meet the
conditions as follows:
(1)
Having a good corporate governance structure;
(2)
Having sound and effective risk management and internal control systems;
(3)
Having an effective information management system;
(4)
Its capital adequacy ratio, ration of badly performing loans, profit-making ability and other important supervisory indices shall
meet the supervisory requirements;
(5)
Having the ability to apportion the working capital: the apportioned working capital shall be no less than 100 million Yuan or equivalent
convertible currency, and the total amount of the working capital apportioned to all the branches shall not exceed 60% of the net
capital of the applicant;
(6)
Having committed no serious cases or no serious illegal or rule-breaking acts within the latest 2 years;
(7)
Having a good risk rating conclusion; and
(8)
Other prudent conditions prescribed by the CBRC.
Article 38
If a state-owned commercial bank or joint -equity commercial bank applies for establishing bankcard centers, instruments centers,
capital operating centers or other branch-level exclusive institutions, the applicant shall meet the conditions as follows:
(1)
The management system reform for exclusive business operations shall accord with the development trends of these business operations;
(2)
The management system reform for exclusive business operations shall accord with the overall strategies and development plans of the
general office, and shall benefit the enhancement of the whole competitiveness;
(3)
Having good corporate governance, its internal control shall be sound and effective, and its main prudent supervision indices accord
with the supervisory requirements of the CBRC;
(4)
Its exclusive business operations shall have been opened up for more than two years, have a certain scale and have accumulated certain
experiences;
(5)
The quality of its assets for exclusive business operations, the profit-making ability and other indi
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State Administration of Taxation
Reply of the State Administration of Taxation concerning the Issue of Tax Collection and Exemption on the Income Obtained by the World
Tourism Organization in China
Guo Shui Han [2006] No. 35
The state administration of taxation of Jiangsu Province,
Your Request for Instructions concerning the Issue of Tax Collection and Exemption on the Income Obtained by the World Tourism Organization
for Providing Design Labor Services (Su Guo Shui Fa [2005] No.244 ) has been received; we hereby make reply as follows:
In accordance with Item (10), paragraph 2 of Section One of Article 1 , and item (1) of Section Nine of Article 3 of the United Nations
Convention on the Privileges and Immunities of the Specialized Agencies that China have signed, the direct tax shall be exempted
on the income, which is obtained by the World Tourism Organization in China. Therefore, the income tax shall be exempted from the
income, which is obtained by the Organization that it provides design labor service to the people’s government of Wujin District
of Changzhou City.
State Administration of Taxation
January 12, 2006
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State Administration of Taxation
2006-01-12
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e037742006011020060110the State Food and Drug Administrationepdf/e04723.pdfB3,A4traditional Chinese medicines prepared in ready-to-use forms, foreign investmente04723Circular of the State Food and Drug Administration on the Relevant Issues concerning the Business Scope of the Foreign-funded Enterprises
Engaging in the Production of Herbal Medicines for DecoctionGuo Shi Yao Jian An [2006] No. 14The food and drug administration bureaus (drug administration bureaus) of all provinces, autonomous regions, and municipalities directly
under the Central Government,According to the provisions of the Industrial Catalogue for Guiding Foreign Investment (promulgated by the Order No. 24 of the State
Development and Reform Commission of the People’s Republic of China and the Ministry of Commerce of the People’s Republic of China)
which came into force as of January 1, 2005, “the application of preparing techniques of traditional Chinese medicine in small pieces
ready for decoction and the products of secret recipe of traditional Chinese medicine already prepared” falls within the category
of industries prohibited from foreign investment.According to the General Rules on Processing Medicine Materials as prescribed in the Drug Code of the People’s Republic of China (2005):
“The term ‘processing of medicine materials’ refers to that medicine materials are manufactured into herbal medicines of certain
specimen for decoction after cleaning, cutting, roasting and boiling so as to meet the requirements of medical treatment and mixture
or preparation, and guarantee the safety and effectiveness of medication.” The processing of medicine materials includes cleaning,
cutting, roasting and boiling. The application of preparing techniques of herbal medicines for decoction refers to the application
of the aforesaid processing techniques.In order to make the foreign investment compatible with the planning of the national economy and social development of China, the
administrative departments of food and drug of all provinces (regions and cities) shall strictly implement the state policies and
guard the access to the industries prohibited from foreign investment. As to any foreign-funded enterprise that has obtained the
approval of access to prohibited industries, the administrative department of food and drug at the provincial level shall, when the
relevant enterprise that engages in the production of herbal medicine for decoction renews its Pharmaceutical Production License,
clearly indicate “cleaning and cutting” on the License so as to restrict the production scope thereof.State Food and Drug AdministrationJanuary 10, 2006
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