ãã(Adopted at the 13th Meeting of the Standing Committee of the Eighth National
People's Congress on May 10, 1995, Promulgated by Decree No. 47 of the President
of the People's Republic of China on May 10, 1995)
ããArticle 1 This law is formulated to protect the legal rights and interests of
the commercial banks, depositors and other clients, standardize the behaviors of
the commercial banks, improve the quality of loan assets, strengthen the
supervision and management and thus ensure the sound and stable operations of
the commercial banks, safeguard financial order and promote the growth of
socialist market economy.
ããArticle 2 Commercial banks referred to in this law are those enterprise legal
persons which are established to absorb public deposits, issue loans, arrange
settlement of accounts and engage in other businesses in accordance with this
law and the "Company Law of the People's Republic of China".
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ããArticle 3 Commercial banks may have the following businesses in part or in
ããArticle 8 Commercial banks should abide by relevant stipulations of laws and
administrative regulations in their businesses and must not do any harm to the
interests of the State and the society.
ããIn approving the application for establishing a commercial bank, the People's
Bank of China should take into consideration the need of economic development
and the competition in banking industry.
ããThe minimum registered capital for setting up an urban cooperative commercial
bank is RMB 100 million yuan, and the minimum registered capital for setting up
a rural cooperative commercial bank is RMB 50 million yuan.
ããThe registered capital should be the actually paid capital.
ããThe People's Bank of China may readjust the amount of minimum registered
capital in accordance with the economic development, but the amount must not be
lower than that stipulated in the preceding clause.
ããArticle 15 Should an application for setting up a commercial bank have been
found in a accordance with the stipulations of Article 14 through examination,
the applicant should fill out an application form and present the following
documents and data:
ããArticle 16 The People's Bank of China will issue a license to the commercial
bank which has been approved to be set up and the bank concerned should register
with the State Administration for Industry and Commerce and get the business
ããIf a commercial bank, which was set up before the promulgation of this law has
its organization form and setup not entirely in accordance with the stipulations
of the "Company Law of the People's Republic of China", it may continue to
operate under the original form and setup, and when the stipulations of the
preceding clause should be strictly applied is up to the decision of the State
ããArticle 18 A solely State owned commercial bank should set up a board of
supervisors formed by representatives of the People's Bank of China and relevant
government departments and specialists and representatives of the Bank's
employees. The method of forming the board of supervisors is to be set by the
ããThe board supervises over the quality of loan assets, proportion between
assets and liability, present and added values of the State assets, and the
bank's senior management personnel's violations of laws and administrative
regulations and their damages to the interests of the bank.
ããArticle 21 Upon its approval of setting up, a branch of a commercial bank
should get a license from the People's Bank of China and register itself with
the license with the department of industry and commerce to get the business
ããA branch of a commercial bank does not have the qualifications of a legal
person and thus shall operate within the business scope entrusted by the
headquarters of the commercial bank in accordance with law. Its civil
liabilities are to be undertaken by the headquarters.
ããThe People's Bank of China will revoke the operation licenses of a commercial
bank or its branches and make an announcement of this if they fail to start
their business in more than six months as from the date of getting the business
licenses without justified reasons, or they stop their business for more than
six consecutive months after they start their business.
ããArticle 26 A commercial bank should use its operation license in accordance
with the stipulations of laws and administrative regulations and is forbidden to
falsify, fabricate, transfer, lease or lend the license.
ãã(1) People who have been declared guilty or fined for corruption, bribery,
encroachment upon and embezzling property or undermining social economic order,
or those who have been deprived of political rights because of committing
ãã(2) People who have been chairman of directors or factory director or manager
of a company or enterprise which has gone bankrupt because of poor management
and are held responsible for the bankruptcy themselves;
ãã(3) People who have been legal representatives of companies or enterprises
whose business licenses had been revoked because of violations of laws and are
held responsible for this themselves; and
ããArticle 29 A commercial bank should follow the principles of voluntary deposit
and free withdrawal, paying interest to depositors and keeping secret for
depositors in handling individual deposits.
ããArticle 30 A commercial bank has the right to refuse any unit or individual to
inquire about the deposits of any other unit except the cases as stipulated by
laws and administrative regulations; the commercial bank has the right to refuse
any unit or individual to freeze and deduct the deposits of any other unit
except the cases as stipulated by laws.
ããArticle 37 Upon a loan, the commercial bank and borrower concerned should
strike a written contract to clearly define the category, purpose, amount
interest rate, repayment period and mode of repayment of the loan, liabilities
in case of violating the contract and other stipulations which both sides deem
ããIf a commercial bank which was set up before the promulgation of this law has
a ratio between assets and liabilities not in accordance with the stipulations
of the preceding clause it should readjust the ratio to suit the stipulations in
a certain period of time.
ããThe specific methods for such an adjustment are to be decided by the State
ããArticle 40 Commercial banks are not allowed to issue credit loans to people
who have connections with the bank and the conditions for issuing guaranteed
loans to people who have connections with the bank must not be more favorable
than those for such loans to other borrowers.
ããThe people who have connections with the bank as referred to in the preceding
ããIf a borrower cannot repay the guaranteed loan on time, the commercial bank
which issues the loan has the right to ask the guarantor to repay the principal
and interest of the loan or enjoy the priority of repayment by security in
accordance with law.
ããArticle 44 In handling account settlement businesses such as honor, remittance
and trust acceptance negotiable instruments, a commercial bank should honor and
enter the receipts and payment into the account book within the set period of
time and must not hold down the bill or money order or return them in violating
ããArticle 48 Enterprises and institutions can choose on their own will a
commercial bank to open their own basic accounts for daily transferance and
settlement of accounts and cash receipts and payment, but cannot open two or
more basic accounts.
ããArticle 54 Commercial banks should establish and improve their own financial
accounting system in accordance with laws, the unified accounting system
formulated by the State and the relevant stipulations of the People's Bank of
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ããArticle 55 Commercial banks should, in accordance with the relevant State
stipulations, truly record and totally report its business activities and
financial affairs, prepare its annual financial affairs report and timely send
the report to the People's Bank of China and Ministry of Finance.
ããArticle 56 Commercial banks should publish their business and auditing reports
for the previous accounting fiscal year in accordance with the regulations of
the People's Bank of China within the last three months of every accounting
ããArticle 59 Commercial banks should, in accordance with the regulations of the
People's Bank of China, formulate their own business regulations and establish
and improve their operation, cash management and safety systems.
ããArticle 62 The People's Bank of China has the right to check and supervise the
deposits, loans, account settling and bad debts of the commercial banks at any
time in accordance with the stipulations of Chapters III, IV and V of this law.
ããCommercial banks should provide financial accounting data, business contracts
and other information about its business and management in accordance with the
requirements of the People's Bank of China.
ããThe purpose of a take-over is to take necessary measures against the
commercial bank which is to be taken over to protect the interests of the
depositors, and restore the normal operation ability of the bank.
ããArticle 69 A commercial bank should apply to the People's Bank of China for a
disbandment due to merger, seperation or reasons set in the Articles of
association of the bank and the application should be accompanied with the
reasons for the disbandment and the plan for balance settlement such as paying
the principal and interest of the deposits. And then the bank shall disband upon
approval of the People's Bank of China.
ããThe commercial bank to be disbanded should set up a group for settling
accounts in accordance with laws and pay its debts such as the principal and
interest of deposits. The People's Bank of China shall supervise over the
ããArticle 70 If a commercial bank is dismantled because of a revoke of its
business license, the People's Bank of China should, in accordance with law, set
up a group for settling accounts in time, and pay its debts such as the
principal and interest of deposits in time according to the plan for accounts
ããWhile the bankrupt commercial bank is undergoing the process of account
settlement it should first pay the principal and interest of the individual
depositors after paying the fees for account settling, employees' wages and
labor insurance which are in arrears.
ããArticle 73 Whenever the appearance of one of the following cases that would do
harm to the property of the depositors and other clients occurs, commercial
banks concerned should undertake to pay the delayed interest and other civil
ãã(2) The bank refuses to honor instruments, does not enter receipts and
payments into account book, holds down bills or instruments or returns the
instruments in violation of the stipulations governing account settling;
ããArticle 74 The People's Bank of China shall order a commercial bank to correct
one of the following cases, confiscate its illegal earnings if any and impose a
fine which is anything between one to five times the illegal earnings or between
RMB100, 000 yuan and 500, 000 yuan if no illegal earnings.
ããThe People's Bank of China may order the bank to stop its business or revoke
its business license if the case is especially serious and the bank refuses to
correct within a set time; and criminal responsibilities will be affixed if the
case is so serious to constitute a crime:
ããArticle 75 The People's Bank of China shall order a commercial bank to correct
one of the cases stated in Article 73 of this law or one of the following cases,
and confiscates its illegal earnings if any and impose a fine which is one to
three times the illegal earnings, or impose a fine between RMB 50, 000 yuan and
300, 000 yuan if no illegal earnings:
ããArticle 76 Disciplinary actions shall be taken against the leading and other
personnel of a commercial bank who have direct responsibilities for the cases in
the preceding three articles; criminal responsibilities shall be affixed if the
case is so serious to constitute a crime.
ããArticle 77 The People's Bank of China shall order the correction of one of the
following cases, and confiscate illegal earnings and impose a fine of one to
three times the illegal earnings, or between RMB 50, 000 yuan and 300, 000 yuan
if no illegal earning:
ããArticle 78 The People's Bank of China shall order a commercial bank to correct
if it does not send relevant documents and data to the People's Bank of China in
accordance with relevant stipulations or violates the stipulations of Article 24
of this law and does not report the changes for approval; if it refuses to
correct within a set time, the People's Bank of China will impose a fine of
RMB10, 000 yuan to 100, 000 yuan against the commercial bank.
ããArticle 79 Criminal responsibilities shall be affixed on those who set up a
commercial bank on their own without the approval of the People's Bank of China
or illegally absorb public deposits or absorb public deposits in a disguised
way; and the above actions shall be banned by the People's Bank of China.
ããArticle 81 Criminal responsibilities shall be affixed on employees of
commercial banks who, taking advantage of their own position, ask for and accept
bribery or violate State regulations to accept various forms of discount and
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ããIf loans or guarantees provided as mentioned in the preceding clause have
caused damages those who are responsible shall undertake the whole or part of
the responsibilities of repayment.
ããArticle 82 Criminal responsibilities shall be affixed on employees of the
commercial banks who, by taking advantage of their own position, embezzle,
divert or encroach upon the funds of the bank or the clients and the cases are
so serious as to constitute a crime; and disciplinary action shall be taken
against those whose case does not constitute a crime.
ããArticle 83 Disciplinary action shall be taken against employees of a
commercial bank who violate this law and are derelict of their duty, causing
damages; criminal responsibilities shall be affixed if the case is so serious as
to constitute a crime.
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ããThose who cause damage because of issuing loans to or providing guarantee for
relatives and friends should undertake the whole or part of the responsibilities
ããArticle 84 Disciplinary action shall be taken against employees of a
commercial bank who leak the State and commercial secrets they have accessed to
during their service; criminal responsibilities shall be affixed if the case is
so serious as to constitute a crime.
ããArticle 85 Disciplinary action shall be taken against those who are directly
in charge or responsible for forcing commercial banks to issue loans or provide
guarantee; those who cause damages for the actions should undertake the whole or
part of the responsibilities of repayment.
ããDisciplinary action shall be taken against employees of a commercial bank who
do not refuse to provide forced loans or guarantees; those who cause damages for
the action should undertake relevant responsibilities of repayment.
ããArticle 86 Upon refusal to the decisions of punishments by the People's Bank
of China, commercial banks and their employees may take the procedures to the
people's court in accordance with the " Administrative Procedure Law of the
People's Republic of China".
ããArticle 87 Commercial banks which were set up with approval in accordance with
the regulations of the State Council need not go through the formalities of
check and approval before this law is promulgated.
ããArticle 88 This law applies to the foreign-funded commercial banks,
Sino-foreign joint venture commercial banks and the branches of foreign
commercial banks in china, and if there are special laws and administrative
regualations governing them, they should follow such special laws and