Banking Supervision and Administration Law of the People's Republic of China
(Adopted at the 6th session of the Standing Committee of the 10th National People's Congress of the People's Republic of China, and amended in accordance with the Decision on Amending the Banking Supervision and Administration Law of the People's Republic of China as adopted at the 24th meeting of the Standing Committee of the 10th National People's Congress of the People's Republic of China on October 31, 2006)
Content
Chapter I General Rules
Chapter II Supervision and Administration Institutions
Chapter III Supervision and Administration Responsibilities
Chapter IV Supervision and Administration Measures
Chapter V Legal Liabilities
Chapter VI Supplementary Rules
Chapter I General Rules
Article 1 This Law is constituted with a view to strengthening the supervision and administration over banking industry, regulating the activities of supervision and administration, preventing and avoiding the banking risks, protecting the legitimate rights and interests of the depositors and other clients, and promoting the sound development of banking industry.
Article 2 The banking supervision and administration institutions of the State Council shall take charge of the supervision and administration over nationwide banking financial institutions and business activities thereof.
The term "banking financial institutions" as mentioned in this Law means the commercial banks, urban credit cooperatives, rural credit cooperatives and other financial institutions and policy banks, which are established within the territory of China and engage in taking in deposits of the general public.
The provisions of this Law over banking supervision and administration shall apply to the supervision and administration over financial assets management companies, trust investment companies, financial companies and the financial lease companies established within the People's Republic of China, and other financial institutions established within the territory of China upon approval of the banking supervision and administration institutions of the State Council.
The banking supervision and administration institutions of the State Council shall, pursuant to the relevant provisions of this Law, undertake supervision and administration over the financial institutions established abroad upon their approval and the overseas business activities of the financial institutions as mentioned in the preceding two paragraphs.
Article 3 The banking supervision and administration shall aim to promote the lawful, steady and sound operation of banking industry, and keep the confidence of the general public in the banking.
And the banking supervision and administration shall protect the fair competition and improve the competitive ability of the banking industry.
Article 4 The banking supervision and administration institutions shall, when undertaking banking supervision and administration, observe the principles of law compliance, openness, impartiality and efficiency.
Article 5 The banking supervision and administration institutions and the functionaries thereof engaged in banking supervision and administration shall fulfill their duties according to law, and shall be protected by law. None of the local governments, governmental departments of all levels, the social parties and individuals may interfere with them.
Article 6 The banking supervision and administration institution of the State Council shall establish a supervision and administration information sharing system with the People's Bank of China and other financial supervision and administration institutions of the State Council.
Article 7 The banking supervision and administration institution of the State Council may also establish cooperation systems for supervision and administration with the banking supervision and administration institutions of other countries or regions so as to implement transnational supervision and administration.
Chapter II Supervision and Administration Institutions
Article 8 The banking supervision and administration institution of the State Council may, in light of the needs for exercising their duties, set up dispatched institutions, and shall carry out unified leadership and management to those dispatched institutions by it.
The institutions dispatched by the banking supervision and administration institution of the State Council shall, within the powers granted by the banking supervision and administration institution of the State Council, fulfill their supervision and administration duties.
Article 9 The functionaries of the banking supervision and administration institutions, who engage in the supervision and administration, shall have the professional knowledge and experience adapting to their respective posts.
Article 10 The functionaries of the banking supervision and administration institutions shall devote to their duties, handle matters according to law, keep impartial and clean, and may not seek improper interests by taking advantage of their posts nor hold concurrent positions in other financial institutions or other enterprises.
Article 11 The functionaries of banking supervision and administration institutions shall keep secrets of the state according to law, and shall be obligated to keep secrets of the banking financial institutions and the parties concerned under their supervision and administration.
In case the banking supervision and administration institution of the State Council exchanges the supervision and administration information with the banking supervision and administration institutions of other countries or regions, it shall make relevant arrangements to keep the information secret.
Article 12 The banking supervision and administration institution of the State Council shall disclose the procedures for supervision and administration, and shall establish the supervision and administration responsibility system and the internal supervision and administration system.
Article 13 When a banking supervision and administration institution copes with the risks of a banking financial institution, investigates into and punishes relevant illegal financial offences, or undertakes other supervision and administration activities, the local governments, the relevant departments of all levels shall provide support and cooperation with it.
Article 14 The auditing, supervision and other organs of the State Council shall conduct supervision over the activities of the banking supervision and administration institutions of the State Council according to law.
Chapter III Supervision and Administration Responsibilities
Article 15 The banking supervision and administration institutions of the State Council shall, according to law and administrative regulations, constitute and issue regulations and rules on the supervision and administration over financial banking institutions and their business activities.
Article 16 The banking supervision and administration institutions of the State Council shall, in light of the requirements and procedures as prescribed in laws and administrative regulations, be responsible for the examination and approval of the establishment, modification, termination and operation scope of the banking financial institutions.
Article 17 As regards an application for establishing a financial institution or that a banking financial institution that modifies the shareholder whose total capital contributions or total shares reach or exceed the prescribed proportion, the banking supervision and administration institutions of the State Council shall examine the sources of funds, financial status, capital adequacy and credit standing of the shareholders.
Article 18 The operation varieties within the operation scope of a banking financial institution shall be subject to the examination and approval of or be registered by the banking supervision and administration institution of the State Council. The specific operations shall be prescribed and announced by the banking supervision and administration institution of the State Council according to laws and administrative regulations.
Article 19 No entity or individual may, without approval of the banking supervision and administration institution of the State Council, establish any banking financial institution or conduct any business activity as a banking financial institution.
Article 20 The banking supervision and administration institutions of the State Council shall carry out qualification management for the appointment of directors and senior managerial personnel of the banking financial institutions, and the concrete measures shall be constituted by the banking supervision and administration institutions of the State Council.
Article 21 The rules for prudent operation of banking financial institutions may be prescribed in the laws and administrative regulations, and may also be made by the banking supervision and administration institutions of the State Council according to the laws and administrative regulations.
The term "rules for prudent operation" as mentioned in the preceding paragraph includes the risk management, internal control, capital adequacy ratio, quality of assets, loss reserve fund, risk concentration, associated transaction and liquidity of assets, etc.
All banking financial institutions shall strictly comply with the rules for prudent operation.
Article 22 The banking supervision and administration institutions of the State Council shall, within the prescribed time limit, make a written decision on approving or disapproving any of the following items; in case it decides to disapprove, it shall specifies the reasons.
(1) As regards the establishment of a banking financial institution, the time limit shall be 6 months from the day when the application documents are received;
(2) As regards the modification or termination, the operation scope or the operation varieties added to the operation scope of a banking financial institution, the time limit shall be 3 months from the day when the application documents are received;
(3) As regards the examination of the qualifications of the directors and senior managerial personnel, the time limit shall be 30 days from the day when the application documents are received.
Article 23 The banking supervision and administration institutions shall conduct non-on-site supervision and administration over the business activities and risk status of the banking financial institutions, establish the supervision and administration information system on banking financial institutions, and shall analyze and evaluate the risk status of the banking financial institutions.
Article 24 The banking supervision and administration institutions shall conduct on-site inspection on the business activities and risk status of the banking financial institutions.
The banking supervision and administration institutions of the State Council shall constitute on-site inspection procedures, and regulate on-site inspections.
Article 25 The banking supervision and administration institutions of the State Council shall adopt consolidated financial statements in conducting supervision and administration over the banking financial institutions.
Article 26 As regards the advice made by the People's Bank of China concerning the inspection on banking financial institutions, the banking supervision and administration institution of the State Council shall make a reply within 30 days as of the day when it receives the advice.
Article 27 The banking supervision and administration institutions of the State Council shall establish a supervision and administration grade evaluation system on banking financial institutions and a risk pre-warning system. It shall determine the frequency and scope of on-site inspections and other necessary measures in light of the grade and the risk situation of a banking financial institution.
Article 28 The banking supervision and administration institutions of the State Council shall establish a post responsibility system for the discovery and reporting of banking emergencies.
In case a banking supervision and administration institution discovers an emergency that may result in a systematic banking risk or may seriously affect the stability of the society, it shall immediately report it to the person in charge of the banking supervision and administration institution of the State Council. If the person in charge deems it necessary to report the emergency to the State Council, he/she shall report it to the State Council immediately, and shall inform the People's Bank of China, the Finance Department of the State Council and other relevant departments.
Article 29 The banking supervision and administration institutions shall, in collaboration with the People's Bank of China, the finance department of the State Council and other relevant departments, establish a banking emergency handling system, constitute banking emergency disposal plan and clearly specify the handing institutions, the personnel and their responsibilities, the measures and procedures so as to timely and effectively handle banking emergencies.
Article 30 The banking supervision and administration institution of the State Council shall be responsible for making unified statistics and statements of the nationwide banking financial institutions, and shall publicize them according to relevant regulations of the State.
Article 31 The banking supervision and administration institutions of the State Council shall guide and supervise the activities of the banking self-disciplinary organizations.
The constitution of any banking self-disciplinary organization shall be reported to the banking supervision and administration institution of the State Council for archival purposes.
Article 32 The banking supervision and administration institution of the State Council may undertake activities of international communication and cooperation related to banking supervision and administration.
Chapter IV Supervision and Administration Measures
Article 33 The banking supervision and administration institutions shall, in light of the needs to fulfill their respective responsibilities, be entitled to demand the banking financial institutions to submit their asset-liability statements, profit statements and other financial and accounting statements, operation management materials and the audit reports issued by certified public accountants.
Article 34 The banking supervision and administration institution may, in light of the requirement of prudent supervision and administration, take the following measures to conduct on-site inspection:
(1) conducting inspection by entering into a banking financial institution;
(2) questioning the functionaries of the banking financial institution, and demanding them to make explanations about the relevant to-be-inspected items;
(3) examining and copying the documents and materials related to the to-be-inspected items, sealing up the documents and materials that may be transferred, hidden or destroyed;
(4) examining 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 and administration institution, for which the number of inspectors may not be less than 2, and the inspectors shall show their legitimate certificates and the inspection notice. In case the number of inspectors is less than 2, or the inspectors fail to show their legitimate certificates and inspection notice, the banking financial institution shall be entitled to refuse the inspection.
Article 35 The banking supervision and administration institutions may, in light of the needs to fulfill their responsibilities, talk with the directors and the senior managerial personnel of a banking financial institution, demand them to give explanations about significant matters concerning the business activities and risk control of the banking financial institution.
Article 36 The banking supervision and administration institutions shall order the banking supervision and administration institutions to faithfully disclose the information on the financial and accounting statements, the status of risk management, the replacement of the directors and senior managerial personnel and other significant matters.
Article 37 In case a banking financial institution violates the prudent operation rules, the banking supervision and administration institution of the State Council or any of its dispatched institutions at the province level shall order it to make corrections within a time limit. In case the banking financial institution fails to do so, or if its offences are so serious that the steady and sound operation of the banking financial institution may be endangered or the legitimate rights and interests of the depositors or other clients may be impaired, the following measures may be taken on the basis of different circumstances upon approval of the person in charge of the banking supervision and administration institution of the State Council:
(1) ordering it to suspend some of its operations, stopping approving new operations;
(2) restricting the distribution of bonus and other incomes;
(3) restricting the transfer of assets;
(4) ordering the controlling shareholder to transfer its stock rights or restricting the powers of relevant shareholders;
(5) ordering it to replace the directors and senior managerial personnel or restricting their powers;
(6) stopping approving the establishment of any new branch.
After a banking financial institution makes rectification and improvement, it shall submit a report to the banking supervision and administration institution of the State Council or to its dispatched institution at the province level, which shall conduct re-inspection. If the banking financial institution is found to satisfy the prudent operation rules upon re-inspection, the relevant measures as mentioned in the preceding paragraph shall be unchained within 3 days as of the completion of re-inspection.
Article 38 In case a banking financial institution has been already or may be subject to a credit crisis, which may seriously impair the legitimate rights and interests of the depositors and other clients, the banking supervision and administration institution of the State Council may take over the banking financial institution or urge it to restructure. The taking over and restructuring shall be carried out according to the relevant laws and regulations of the State Council.
Article 39 In case a banking financial institution conducts illegal operation or faulty operation and management, which will seriously impair the financial order and the interests of the general public unless cancelled, the banking supervision and administration institution of the State Council shall be entitled to cancel it.
Article 40 In case a banking financial institution is taken over, restructured or canceled, the banking supervision and administration institution of the State Council shall be entitled to demand the directors, the senior managerial personnel and other functionaries to fulfill their duties according to the requirements of the banking supervision and administration institution of the State Council.
During the course of taking over, restructuring or cancellation liquidation, the following measures may be taken against the direct liable directors, senior managerial personnel and other direct liable persons upon approval of the person in charge of the banking supervision and administration institution of the State Council:
(1) In case the direct liable directors, senior managerial personnel and other direct liable persons leave China, and the interests of the state will be subject to a serious loss, the exit administrative organs shall be given a notice on prohibiting them from leaving China according to law;
(2) It shall request the judicial organ to prohibit the banking financial institution from moving, transferring its properties or setting other rights to its properties.
Article 41 The banking supervision and administration institution shall, upon approval of the person in charge of the banking supervision and administration institution of the State Council or upon approval of the person in charge of its dispatched institution at the province level, be entitled to inquire about the bank accounts of the banking financial institution that is suspected of conducting illegal financial operations, its functionaries and other persons involved. With regard to those who are suspected of transferring or hiding illegal funds, upon approval of the person in charge of the banking supervision and administration institution, an application may be filed to the judicial organ for freezing the funds.
Article 42 When conducting any inspection on banking financial institutions, the banking supervision and administration institution may, upon approval of the person in charge of the banking regulatory organ at or above the level of districted city, take the following measures against any entity or individual suspected of being involved in illegal acts:
(1) inquiring the relevant entity or individual, and requiring it/him to explain the relevant matters;
(2) inspecting and copying relevant financial accounting, property registration and other documents and materials;
(3) conducting advanced registration and preservation of documents and materials that may be transferred, concealed, destroyed or falsified.
When the banking supervision and administration institution takes the measures as prescribed in the preceding Paragraph, there shall be not less than two functionaries, who shall show their lawful certificates and investigation notices. In case the number of functionaries is less than 2 or they fail to show lawful certificates or investigation notices, the relevant entity or individual shall be entitled to refuse the investigation. In case the measures are adopted according to law, the relevant entity or individual shall provide coordination, faithfully explain the relevant conditions and provide relevant documents and materials, and may not refuse to do so, or hamper or hide anything.
Chapter V Legal Liabilities
Article 43 Under any of the following circumstances, any of the functionaries engaged in banking supervision and administration, shall be given an administrative sanction according to law; if any crime is constituted, he (she) shall be subject to criminal liabilities.
(1) violating requirements to examine and approve the establishment, modification, termination, operation scope and operation varieties within the operation scope of the banking financial institutions;
(2) violating requirements to conduct on-site inspections on the banking financial institutions;
(3) failing to report the emergencies according to Article 28 of this Law;
(4) violating the requirements to inquire about the banking accounts or applying for freezing them;
(5) violating the requirements to take measures against or punish a banking financial institution;
(6) investigating the relevant entity or individual against Article 42 of this Law; or
(7) other offences of abusing his (her) powers or neglecting his (her) duties.
In case any functionary for supervision and administration over the banking supervision and administration institutions embezzles public funds, accepts bribes, divulges state secrets, commercial secrets or personal privacy, if any crime is constituted, he shall be subject to criminal liabilities; and if no crime is constituted, he shall be given an administrative sanction.
Article 44 Any one who establishes a banking financial institution without approval or illegally carries on business activities as a banking financial institution shall be banned by the banking supervision and administration institution of the State Council; if any crime is constituted, he (she) shall be subject to criminal liabilities; if no crime is constituted, the banking supervision and administration institution of the State Council shall confiscate the illegal gains; if the amount of illegal gains is more than 550, 000 Yuan, a fine of more than the same amount but less than 5 times of the amount of the illegal gains shall be imposed ; if there are no illegal gains or the amount of the illegal gains is less than 550, 000 Yuan, a fine of 500, 000 Yuan up to 2, 000, 000 Yuan shall be imposed.
Article 45 In case a banking financial institution is under any of the following circumstances, it shall be ordered to make corrections by the banking supervision and administration institution of the State Council. If there are illegal gains, the illegal gains shall be confiscated; if the amount of the illegal gains is more than 500, 000 Yuan, a fine of more than the same amount or less than 5 times of the amount of the illegal gains shall be imposed; if there are no illegal gains or the illegal gains are less than 500, 000 Yuan, a fine of 500, 000 up to 2, 000, 000 Yuan shall be imposed. If the circumstance is extremely serious, or the banking financial institution fails to make corrections within the time limit, the banking supervision and administration institution of the State Council may order it to stop its operation for internal rectification or withdraw its business license; if any crime is constituted, it shall be subject to criminal liabilities according to law:
(1) establishing branches without approval;
(2) making modification or termination without approval;
(3) violating any of the regulations, or carrying on business activities without approval or without registration;
(4) violating any of the regulations, elevating or lowering savings interest rates and credit interest rates.
Article 46 In case a banking financial institution is under any of the following circumstances, it shall be ordered to make corrections by the banking supervision and administration institution of the State Council, and shall be imposed upon a fine of 200, 000 Yuan up to 500, 000 Yuan; if the circumstance is extremely serious, or if it fails to make corrections within the time limit, the banking supervision and administration institution of the State Council may order it to stop its business operation for internal rectification or withdraw its business license; if any crime is constituted, it shall be subject to criminal liabilities according to law:
(1) appointing directors and senior managerial personnel without undergoing qualification examination;
(2) refusing or hindering the non-on-site supervision and administrations or on-site inspection;
(3) providing false statements, reports and other documents and materials, or providing statements, reports and other documents and materials without disclosing imports facts;
(4) failing to disclose the information as required;
(5) violating the prudent operation rules seriously; or
(6) refusing to implement the measures as provided in Article 37 of this Law.
Article 47 In case a banking financial institution fails to provide the statements, reports and other documents and materials as required, it shall be ordered to make corrections by the banking supervision and administration institution within a time limit. In case it fails to make corrections within the time limit, it shall be imposed on a fine of 100, 000Yuan up to 300, 000 Yuan.
Article 48 In case a banking financial institution violates the laws, administrative regulations and the relevant regulations of the state on banking supervision and administration, the banking supervision and administration institution shall not only punish it according to Articles 43 through 46 of this Law, but also may take the following measures in light of different circumstances:
(1) Ordering the banking financial institution to impose disciplinary sanctions upon the direct liable directors, senior managerial personnel and other liable persons;
(2) If the offences of the banking financial institution constitute no crime, the direct liable directors, senior managerial personnel and other direct liable persons shall be given a warning, and be imposed upon a fine of 50, 000 up to 500, 000 Yuan;
(3) Disqualifying the direct liable directors, senior managerial personnel from taking the positions for a certain period even a life-long period, prohibiting the direct liable directors, senior managerial personnel and other direct liable persons from engaging in banking business operation for a certain period even a life-long period.
Article 49 In case anyone hampers the inspection or investigation legally carried out by the functionaries of the banking supervision and administration institution, he shall be given a public security administrative penalty; and if any crime is constituted, he shall be subject to criminal liabilities.
Chapter VI Supplementary Rules
Article 50 In case it is otherwise provided for the supervision and administration over policy banks and financial assets management companies established within the People's Republic of China in laws and administrative regulations, such laws and administrative regulations shall prevail.
Article 51 In case it is otherwise provided for the supervision and administration over foreign-funded banking financial institutions, Chinese-foreign joint equity banking financial institutions and branches of foreign banking financial institutions established within the People's Republic of China in laws and administrative regulations, the relevant laws and administrative regulations shall prevail.
Article 52 This Measures shall come into force as of February 1, 2004. |
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