Following the endorsement by the first ChairmenĄ¯s meeting of China Banking Regulatory Commission (CBRC) on May 26th, 2003, the CBRC is herein issuing the Decision on Amendments to Bank Licensing Policies and Procedures, which shall enter into effect as of July 1st, 2004.

                                                Chairman LIU Mingkang

                                                   May 29th, 2003     The CBRC Decision on Amendments to Bank Licensing Policies and Procedures

In order to enhance the licensing efficiency and promote financial innovation, the China Banking Regulatory Commission (hereinafter referred to as the CBRC) decides to make the following amendments to bank licensing policies and procedures.

  1.  Amendment to the authority pertaining to licensing bank branches

(1) The application for preparing a new branch by a policy bank, a wholly state-owned commercial bank or a joint-stock commercial bank shall be filed with and reviewed by the CBRC provincial office in the province where the proposed branch is established, and shall be subject to the final approval by the CBRC headquarters. After the CBRC headquarters approves the preparation of the proposed branch, an application to commence business by the proposed branch shall be filed with and subject to the approval by the CBRC provincial office, who, if approves the application, shall issue the license to the new branch and submit a copy of the license to the CBRC headquarters for record. The policies and procedures for licensing a foreign bank branch remain unchanged.

(2) Where a bank seeks to establish a sub-branch at a provincial capital city, the application for both preparation and business commencement of the proposed sub-branch shall be filed with and subject to the approval by the CBRC provincial office located in the underlying province, who, if approves the application, shall issue the license to the new sub-branch.

(3) Where a bank seeks to establish a sub-branch at any city other than a provincial capital city, the application for both preparation and business commencement of the proposed sub-branch shall be filed with and reviewed by the CBRC field office located at the underlying city, and shall be subject to the final approval by the CBRC provincial office in the province where the proposed sub-branch is located. After the CBRC provincial office approves the preparation of the proposed sub-branch, the application to commence business by the sub-branch shall be filed with and subject to the approval by the aforementioned CBRC filed office, who, if approves the application, shall issue the license to the new sub-branch and submit a copy of the license to the CBRC provincial office for record.

2.  Amendments to policies for licensing a new line of business

(1) Domestic commercial banks wishing to conduct the following lines of business are no longer required to obtain the prior approval from the CBRC: the factoring service to domestic traders, the clearing service to the securities transactions (fund transfer between bank account and securities trading account), insurance agent business, the custody of investment accounts assigned to securities firms by institutional investors, the custody of fiduciary assets, and the custody of annuity accounts of an enterprise. Domestic commercial banks seeking to conduct the following lines of business are no longer required to file with the CBRC for record: the discount of negotiable instruments with interest paid by the purchaser or by the party designated by the contract, the overdraft service to legal entities, and collection of proceeds from sales of fiduciary products.

(2) Foreign-funded banks wishing to conduct the following lines of business are no longer required to file with the CBRC for record: the factoring service to the domestic traders, the discount of negotiable instruments with interest paid by the purchaser or by the party designated by the contract, and the overdraft service to legal entities.

(3) The head-office of a domestic wholly state-owned commercial bank or a joint-stock commercial bank is required to file an after-the-fact notice with the CBRC headquarters within ten working days from the date of commencing the aforementioned lines of business. A city or rural commercial bank, or a foreign-funded bank is required to file an after-the-fact notice with the relevant CBRC provincial or field office within ten working days from the date of commencing the aforementioned lines of business.  

(4) A bank is permitted to authorize any of its branches or sub-branches to conduct any of the new business activities approved by the CBRC. And following the authorization, a branch or sub-branch of the bank is permitted to conduct the new business activities, but shall file an after-the-fact notice with the relevant CBRC provincial or field office within ten working days from the date of business commencement.

3. Amendments to qualification review of banksĄ¯ senior managerial personnel

(1) Where a senior managerial personnel at a domestic bank, a wholly foreign-funded bank or a Sino-foreign joint venture bank moves to a new position at the same managerial level within the bank, he or she is not required to seek a second qualification review if his or her qualifications have been previously reviewed and approved by the CBRC.

(2) The ex-post audit results and the information related to the qualification review of the above mentioned senior managerial personnel shall be reported in writing to the relevant CBRC provincial or field office within a month from the date of his or her leaving the previous position.

(3) A foreign-funded bankĄ¯s sub-branch is no longer required to file for record with the CBRC the qualifications of its vice-presidents.

4. The existing licensing policies and procedures pertaining to urban and rural credit cooperatives as well as postal savings institutions shall remain unchanged.