（Adopted at the 6th Meeting of the standing¹ committee of the Tenth National people's congress on December 27，2003）

颁布日期：20031227 　实施日期：20040201 　颁布单位：全国人大常委会

　　Order of the President of the people's Republic of china No 11

　　The Law of the people's Republic of china on Regulation of and supervision² over the Banking³ Industry， adopted at the 6th Meeting of the Standing committee of the Tenth National people's Congress of the people's Republic of china on December 27， 2003，is hereby promulgated⁵ and shall go into effect as of February 1，2004.

　　Hu Jintao president of the people's Republic of china December 27，2003

　　contents

　　Chapter I General provisions

　　Chapter II The Regulatory Authority

　　Chapter III Regulatory and supervisory Responsibilities

　　Chapter IV Supervisory Measures

　　Chapter V Legal Responsibility

　　Chapter VI Supplementary⁶ provisions

　　Chapter I

　　General provisions

　　Article 1 this law is enacted⁷ with a view to improving regulation of and supervision over the banking industry， standardizing⁸ such regulation and supervision， preventing and mitigating⁹ risks in the banking industry， protecting the lawful¹⁰ rights and interests of depositors and other customers， and promoting the sound development of the banking industry.

　　Article 2 the banking regulatory authority under the state council shall be responsible for the regulation of and supervision over the financial institutions of the banking industry and their business operations throughout the country.

　　For purposes of this law， the “financial institutions of the banking industry ”refer to the financial institutions established in the people's republic of china that receive deposits from the general public， including， among others， commercial banks， urban credit cooperatives， and policy banks.

　　The provisions of the Law pertaining¹¹ to the regulation of and supervision over the financial institutions of the banking industry are applicable to the regulation and supervision of the financial asset management companies， trust and investment corporations， finance companies and financial leasing companies established in the territory of the people's Republic of china and other financial institutions established with the approval of the banking regulatory authority under the state council.

　　The banking regulatory authority under the state council shall， in accordance with the relevant provisions of this law， regulate and supervise the financial institutions that， upon its approval， are established outside the people's Republic of china， as well as the business operations conducted abroad by the financial institutions mentioned in the preceding two paragraphs.

　　Article 3 the objectives of regulation of and supervisions over the banking industry are to promote the lawful， sound and steady operation of the baking industry and preserve public trust in the industry.

　　The banking industry shall be regulated and supervised in such a way as to protect fair competition in the industry and increase the competitiveness of the industry.

　　Article 4 when exercising regulation and supervision， the banking regulatory authority shall follow the principles of law-abiding openness， impartiality¹³ and efficiency.

　　Article 5 performance of the duties of supervision in accordance with law by banking regulatory and its staff members engaged in supervision shall be protected by law， Local governments， government departments at various levels， public organizations and individuals shall not interfere¹⁴.

　　Article 6 the banking regulatory authority under the state council shall establish a mechanism¹⁵ with the people's Bank of China and other financial regulatory authorities under the state council for sharing supervisory information.

　　Article 7 the banking regulatory authority under the state council may establish a cooperative mechanism of supervision with the banking regulatory authorities in other counties or regions for cross-border supervision.

　　Chapter II

　　The Regulatory Authority

　　Article 8 In light of the need to perform its duties， the banking regulatory authority under the state council set up local offices. It shall exercise unified¹⁶ leadership and administration of such offices.

　　The local offices of the banking regulatory authority under the state council shall perform their supervisory duties within the scope authorized¹⁷ by the said authority.

　　Article 9 the staff members of the banking regulatory authority who are engaged in supervision shall have the professional knowledge and work experience commensurate with the positions are holding.

　　Article 10 staff members of the banking regulatory authority shall be devoted¹⁸ to their duties， act in accordance with law and be impartial¹² and honest； they shall not take advantage of their positions to seek illegitimate benefits， or concurrently¹⁹ hold positions in enterprises such as financial institutions.

　　Article 11 staff members of the banking regulatory authority shall， in accordance with law， guard state secrets， and it is incumbent²⁰ upon them to guard the secrets of the financial institutions of the banking industry and of the parties subject to their supervision.

　　For exchanging supervisory information with the banking regulatory authorities of other countries and regions， the banking regulatory authority under the state council shall make arrangements for preserving the confidentiality²¹ of information.

　　Article 12 the banking regulatory authority under the state council shall make public its supervisory procedures， and establish a supervisory responsibility system and an internal supervisory system.

　　Article 13 local governments and the relevant government departments at various levels shall cooperate with and provide assistance to the banking regulatory authority when the latter deals with risks confronted by financial institutions of the banking industry， investigates and handles violations²³ of law in finance， and exercises supervision in other manners.

　　Article 14 the auditing²⁵ supervisory and other departments under the state council shall， in accordance with the provisions of relevant laws， oversee²⁶ the activities of the banking regulatory authority under the state council.

　　Chapter III

　　Regulatory and Supervisory Responsibilities

　　Article 15 the banking regulatory authority under the state council shall， in accordance with laws and administrative²⁷ regulations， formulate²⁸ and promulgate⁴ supervisory rules and regulations governing the financial institutions of the banking industry and their business activities.

　　Article 16 the banking regulatory authority under the state council shall， in accordance with the requirements and procedures provided for in laws and administrative regulations， examine， before giving approval， the establishment， change， termination and business scope of financial institutions of the banking industry.

　　Article 17 where an application is submitted for the establishment of a financial institution of the banking industry and where such an institution intends to replace a shareholder²⁹ that holds more than the specified³⁰ percentage of the total amount of capital or shares， the banking regulatory authority under the state council shall examine the source of capital， financial strength， ability to replenish³¹ capital and integrity of the shareholders³².

　　Article 18 the types of services offered by a financial institution of the banking industry within its business scope shall， in accordance with relevant regulations be subject to examination and approval by the banking regulatory authority under the state council or be submitted to the authority for the record. With regard to the types of services that are subject to examination and approval or to being on record， the banking regulatory authority under the state council shall， in accordance with relevant laws and administrative regulations， formulate regulations and make them known to the public.

　　Article 19 without approval by the banking regulatory authority under the state council， no institution or individual may establish a financial institution of the banking industry or engage in business activities of such an institution.

　　Article 20 the banking regulatory authority under the state council shall exercise control of the qualifications for the positions of the directors and senior managers of the financial institutions of the banking industry. Specific measures in this regard shall be formulated³³ by the banking regulatory authority under the state council.

　　Article 21 the rules of prudent³⁴ operation of the financial institutions of the banking industry shall be stipulated³⁵ in laws or administrative regulations， and they may also be formulated by the banking regulatory authority under the state council in accordance with relevant laws and administrative regulations.

　　The rules of prudent operation mentioned in the preceding paragraph shall cover， among other things， risk management， internal control， capital adequacy， asset quality， loan loss provisioning， risk concentration， connected transactions， and liquidity³⁶ management of assets.

　　The financial institutions of the banking industry shall strictly³⁷ observe the rules of prudent operation.

　　Article 22 the banking regulatory authority under the state council shall， within a prescribed period of time， make a decision of approval or disapproval³⁸ in writing in response to the following applications； if it makes a decision of disapproval， it shall explain the reasons why：

　　（1）for the establishment of a financial institution of the banking industry， it is six months from the date it receives the application documents；

　　（2）for the change or termination of a financial institution of the banking industry， for the business scope or for offering more types of services within the business scope， it is three months from date it receives the application documents； and

　　（3）for examination or the qualifications of a director or senior manager， it is 30 days from the date it receives the application documents.

　　Article 23 the banking regulatory authority shall conduct off-site supervision of the business operations and risk profile of the financial institutions of the banking industry， for which it shall establish an information system to analyse and assess the risk profile of such institutions.

　　Article 24 the banking regulatory authority shall conduct on-site inspection³⁹ of the business operations and risk profile of the financial institutions of the banking industry.

　　The banking regulatory authority under the state council shall formulate procedures for on-site inspection to standardize⁴⁰ such inspection.

　　Article 25 the banking regulatory authority under the state council shall supervise the financial institutions of the banking industry on a consolidated⁴¹ basis.

　　Article 26 with respect to the proposal made by the people's Bank of china for inspection of a financial institution of the banking industry， the banking regulatory authority under the state council shall respond within 30 days from the date it receives the proposal.

　　Article 27 the banking regulatory authority under the state council shall establish a rating system and an early-warning mechanism for supervision over the financial institutions of the banking industry， in order to determine， on the basis of the rating and risk profile of such institutions， the frequency and scope of on-site inspection of the institutions， as well as other supervisory measures that need to be taken.

　　Article 28 the banking regulatory under the state council shall establish a system of post responsibility for identifying and reporting emergencies in the banking industry.

　　When it identifies any emergency that may lead to systemic risks in the banking industry and thus seriously jeopardize⁴² social stability， the banking regulatory authority shall immediately report the matter to the leading member of the banking regulatory authority under the state council； the leading member shall， when deeming it necessary immediately report to the state council while informing the people's Bank of china， the finance department and other relevant departments under the state council of the matter.

　　Article 29 the banking regulatory authority under the state council shall， in conjunction with the people's Bank of china， the finance department and other relevant departments under the state council， establish a system for coping with emergencies in the banking industry， including formulating⁴³ contingency⁴⁴ plans， designating institutions and staff members， specifying⁴⁵ their responsibilities and the measures and procedures， in order to ensure that emergencies in the banking industry are handled in a timely and effective manner.

　　Article 30 the banking regulatory authority under the state council shall be responsible for compiling， in a unified manner， statistics and reports of the financial institutions of the banking industry throughout the country and， in accordance with the relevant regulations of the state， publish the statistics and reports.

　　Article 31 the banking regulatory authority under the state council shall guide and oversee the activities of the self -regulated organizations of the banking industry.

　　The self-regulated organizations of the banking industry shall submit their articles of association to the banking regulatory authority under the state council for the record.

　　Article 32 the banking regulatory authority under the state council may engage in international exchange and cooperation related to regulation of and supervision of and supervision over the banking industry.

　　Chapter IV

　　Supervisory Measures

　　Article 33 the banking regulatory authority shall， in light of the need for performing its duties， have the power to require the financial institutions of the banking industry to submit， in accordance with relevant regulations， their balance sheets， profit statements， other financial accounting⁴⁶ statements， statistical⁴⁷ reports and information concerning business operations and management， as well as the audit²⁴ reports prepared by certified⁴⁸ public accountants.

　　Article 34 the banking regulatory authority may take the following measures to conduct to conduct on-site inspection， as required by prudent supervision：

　　（1）to enter a financial institution of the banking industry for on-site inspection；

　　（2）to interview staff members of a financial institution and require them to provide explanations on the mattes under inspection；

　　（3）to check and make copies of the financial institution's documents and materials related to the under inspection， and to seal up the documents and materials that are likely to removed， concealed⁵⁰ or destroyed； and

　　（4）to examine the computer system with which the financial institution controls its business data.

　　On-site inspection shall be subject to approval by the leading member of the banking regulatory authority. For on-site inspection， there shall be no less than two inspectors⁵¹， who shall produce their legal certificates and the written notification of inspection. Where there are less than two inspectors， or no legal certificates and written notification of inspection are produced， the financial institution shall have the right to refuse to accept inspection.

　　Article 35 the banking regulatory authority may， in light of the need for performing its duties， hold supervisory consultations⁵² with the directors and senior managers of a financial institution of the banking industry， asking them to explain the important matters concerning business operations and risk management.

　　Article 36 The banking regulatory authority shall instruct financial institutions of the banking industry to disclose， truthfully and in accordance with relevant regulations， to the public information， including， among other things， their financial and accounting reports， statements of risk management， changes in the directors and senior managers and other important matters.

　　Article 37 where a financial institution of the banking industry violates the rules of prudent operation， the banking regulatory authority under the state council or its office at the provincial⁵³ level shall instruct it to rectify⁵⁴ within a time limit， if it fails to comply at the expiration⁵⁵ of the time limit， or the violation²² seriously threatens the sound and steady operation of the institution， jeopardizes⁵⁶ the lawful rights and interests of the depositors and other customers， the banking regulatory authority under the state council or its office at the provincial level may， with the approval of the leading member， take the following measures， depending on the seriousness of the circumstances：

　　（1）instructing it to suspend part of its business or ceasing to give approval to its of new businesses；

　　（2）restricting the distribution of dividends⁵⁷ and other returns；

　　（3）restricting asset transfers；

　　（4）instructing the holding shareholders transfer their rights or restricting the rights of the shareholders concerned；

　　（5）instructing the institution to replace the directors or senior managers or restricting their； and

　　（6）ceasing to give approval to its establishment of new branches.

　　After rectification⁵⁸， the financial institution shall submit a report to the banking regulatory authority under the state council or its office at the provincial level. After the said authority or office inspects the institution and accepts it as conforming to the rules of prudent operation， it shall， within three days after the date of acceptance， discontinue the measures prescribed in the preceding paragraph.

　　Article 38 where a financial institution of the banking industry is experiencing or is likely to experience a credit crisis， thereby⁵⁹ seriously jeopardizing⁶⁰ the lawful rights and interests of depositors and other customers， the banking regulatory authority under the state council may， in accordance with law， take over the institution or facilitate its restructuring. The take-over and restructuring shall be carried out in accordance with relevant laws and the regulations of the state council.

　　Article 39 where a financial institution of the banking industry operates in violation of laws or is not operated or managed properly， thereby seriously threatening financial order and undermining public interests unless it is closed， the banking regulatory authority under the state council shall have power to close it.

　　Article 40 where a financial institution of banking industry is taken over， restructured， or closed， the banking regulatory authority under the state council shall have the power to require the directors， senior managers and other staff members the institution to perform their duties according to the requirements of the authority.

　　In the course of the take-over， restructuring or liquidation⁶¹ after the closure of the institution， the banking regulatory authority under the state council may， with the approval of the leading member of the authority， take the following measures against the directors and senior managers who are directly in charge and other staff members who are directly responsible：

　　（1）where their departure from the peoples Republic of china will cause heavy losses to the interests of the state， notifying the exit control authority of the need to prevent them， in accordance with law， from leaving the country； and

　　（2）submitting an application to the judicial⁶² authority for prohibiting their moving to other places or their transferring of their property， or for establishing other rights on their property.

　　Article 41 A banking regulatory authority shall， with the approval of the leading member of the banking regulatory authority under the state council or its office at the provincial level， have the power to inquire about the bank accounts of the financial industry of the banking industry suspected of violating laws in financial affairs， and the bank accounts of its staff member and connected parties； and may， with the approval of the said leading member， submit an application to the judicial authority for freezing the illegally obtained funds that are suspected of being about to be moved to other places or concealed.

　　Chapter V

　　Legal Responsibility

　　Article 42 Any staff member of the banking regulatory authority engaged in supervision commits any of the following acts shall be given administrative sanctions according to law， and if a crime is constituted he shall be investigated for criminal responsibility in accordance with law：

　　（1） in violation of relevant regulations examining and giving approval to the establishment， change or termination of a financial institution of the banking industry， or its business scope or the services it offers within its business scope；

　　（2）in violation of relevant regulations conducting on-site inspection of a financial institution of the banking industry；

　　（3）failing to report an emergency in accordance with the provisions in article 28 of this Law；

　　（4） in violation of relevant regulations inquiring about bank accounts or submitting an application for freezing funds；

　　（5） in violation of relevant regulations， taking measures against or penalizing⁶³ financial institution of the banking industry； and

　　（6）other acts such abuse of power and neglect of duties.

　　Any staff member of the banking regulatory authority engaged in supervision who commits embezzlement⁶⁴， bribery⁶⁵ or divulgence⁶⁶ of state secrets or the business secrets he knows， which constitutes a crime， shall be investigated for criminal responsibility according to law； and if it is not serious enough to constitute a crime， he shall be given administrative sanctions according to law.

　　Article 43 where a financial institution of the banding industry is established without authorization⁶⁷， or the business activities of financial institutions are illegally engaged in， the banking regulatory authority under the state council shall outlaw⁶⁸ such an institution and such business activities. If a crime is constituted， criminal responsibility shall be investigated according to law， if the case is not serious enough to constitute a crime， the unlawful gains shall be confiscated⁶⁹ by the banking regulatory authority under the state council； if the unlawful gains exceed RMB 500，000 yuan， a fine of not less than the amount of the unlawful gains but not more than five times that amount shall in addition， be imposed and； and if there are no unlawful gains or the amount of such gains is less than 500，000 yuan， a fine of not less than 500，000 yuan but not more than 2，000，000yuan shall be imposed.

　　Article 44 where a financial institution of the banking industry commits one of the following acts， it shall be instructed by the banking regulatory authority under the state council to rectify if there are unlawful gains such gains shall be confiscated； if the unlawful gains exceed 500，000 yuan， it shall， in addition， be fined not less than the amount of such gains but not more than five times than amount； if there are no unlawful gains， or such gains are less than 500，000 yuan， it shall be fined not less than 500，000 yuan but not more than 2，000，000 yuan； if the circumstances are particularly serious， or if the institution fails to rectify within the prescribed period of time， the banking regulatory under the state council may instruct it to suspend business for rectification or revoke⁷⁰ its business license⁷¹； if a crime is constituted， the institution shall be investigated for criminal responsibility according to law：

　　（1）establishing a branch without approval；

　　（2）making changes or terminating business operations without approval；

　　（3）in violation of relevant regulations， engaging in business activities for which no approval is obtained or which are not put on record； and

　　（4） in violation of relevant regulations raising or lowering interest rates on deposits or loans.

　　Article 45 where a financial institution of the banking industry commits one of the following acts， the banking regulatory authority under the state council shall instruct it to rectify and shall， in addition， impose on it a fine of not less than 200，000 yuan but not more than 500，000 yuan； if the circumstances are particularly serious， or if the institution fails to rectify within the prescribed period of time， the said authority may instruct it to suspend business for rectification or revoke its business license； if a crime is constituted， the institution shall be investigated for criminal responsibility according to law：

　　（1）appointing directors or senior managers without subjecting their qualifications for the positions to examination；

　　（2）refusing to accept or obstructing⁷² the off-site supervision or on-site inspection；

　　（3）providing statements， reports， documents or materials that are false or conceal⁴⁹ important facts；

　　（4）failing to disclose information to the public accordance with relevant regulations；

　　（5）violating the rules of prudent operation to a serious extent； and

　　（6）refusing to enforce the measures as provided for in Article 37 of this Law.

　　Article 46 where a financial institution of the banking industry fails to provide statements， reports， documents or materials in accordance with relevant regulations， the banking regulatory authority shall instruct it to rectify. If it fails to comply within the prescribed period of time， it shall be fined not less than 100，000 yuan but not more than 300，000 yuan.

　　Article 47 where a financial institution of the banking industry violates laws， administrative regulations or regulations of the state governing regulation and supervision of the banking industry， the banking regulatory authority may， in addition to the penalties specified in articles 43，44，45 and 46 of this law， take the following measures， depending on the seriousness of the circumstances：

　　（1）to instruct the financial institution to impose disciplinary sanctions on the directors and senior mangers who are directly in charge and the other persons who are directly responsible；

　　（2） if the case is not serious enough to constitute a crime， to give disciplinary warnings to the directors and senior managers who are directly in charge and the other persons who are directly responsible and impose on them each a fine of not less than 50，000 yuan but not more than 500，000 yuan； and

　　（3） to disqualify the directors and senior mangers who are directly in charge for a specified period of for life， or to prohibit them and the other persons who are directly responsible from working in the banking industry for a specified period of time or for life.

　　Chapter VI

　　Supplementary provisions

　　Article 48 where with regard to the regulation of and supervision over the policy banks and asset management companies established in the territory of the people's Republic of china， laws and administrative regulations provide otherwise the provisions there shall prevail.

　　Article 49 where with regard to the regulation of and supervision over the wholly foreign-funded financial institutions， Chinese-foreign joint⁷³ venture financial institutions and branches of foreign financial institutions of the banking industry that are established in the territory of the people's Republic of china laws and administrative regulations provide otherwise， the provisions there shall prevail.

　　Article 50 this law shall go into effect as of February 1，2004.

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