Following the endorsement by the 53th Chairmen’s meeting of China Banking Regulatory Commission on November 17th, 2006, the CBRC is herein promulgating the Rules for Implementing the Regulations of the People’s Republic of China on Administration of Foreign-funded Banks, which shall enter into effect as of December 11, 2006.
                                                                    
Chairman LIU Mingkang
November 24th, 2006 

Rules for Implementing the Regulations of the People’s Republic of China on Administration of Foreign-funded Banks

Chapter I General Provisions

Article 1  These rules are formulated in accordance with the Law of the People’s Republic of China on Banking Regulation and Supervision, the Law of the People’s Republic of China on Commercial Banks and the Regulations of the People’s Republic of China on Administration of Foreign-funded Banks (hereinafter referred to as the Regulations).

Article 2   The term “banking regulatory agency of the State Council” in the Regulations refers to the China Banking Regulatory Commission (hereinafter referred to as the CBRC), and the term “banking regulatory agency” refers to both the CBRC and its provincial and local offices.

Chapter II       Establishment and Registration

Article 3  The prudential requirements referred to in the Regulations and these Rules shall include, but be not limited to, the following:

(1)   having a good reputation in the banking sector and a good social image;
(2)   having persistently sound business performance and good asset quality;
(3)   the senior management having the professional expertise and management competence;
(4)   having a sound risk management system and effective in controlling the risks of connected transactions;
(5)   having sound internal controls and an effective management information system;
(6)   compiling financial and accounting reports in line with prudent accounting principles and having a clean report by accounting firms on the financial and accounting reports of the three consecutive years prior to the submission of the application;
(7)   having no record of serious violations of laws or regulations;
(8)   having effective capital management and replenishment mechanism; and
(9)   having a sound corporate governance structure.

Subparagraph (8) and (9) of this Article shall apply to a wholly foreign-funded bank and its shareholders, a Chinese-foreign joint venture bank and its shareholders, as well as a foreign bank.

Article 4  The term “major shareholder” referred to in Article 11 of the Regulations refers to a commercial bank holding 50 per cent or more of the capital or the shares of a proposed Chinese-foreign joint venture bank, or having any of the following relations with the proposed Chinese-foreign joint venture bank though without holding 50 per cent or more of the capital or the shares of the proposed Chinese-foreign joint venture bank:
(1)   having 50 per cent or more of the voting power of the proposed Chinese-foreign joint venture bank;
(2)   having the power to control the financial and operational policies of the proposed Chinese-foreign joint venture bank;
(3)   having the power to appoint or dismiss a majority of the members of the board of directors or of a similar decision-making function of the proposed Chinese-foreign joint venture bank; and
(4)   having 50 per cent or more of the votes in the board of directors or a similar decision-making function of the proposed Chinese-foreign joint venture bank.

     The major shareholder of the proposed Chinese-foreign joint venture bank shall incorporate in its consolidated financial statements the statements of the proposed Chinese-foreign joint venture bank.

Article 5  A financial institution, a commercial bank, a Chinese company or enterprise, under any of the following circumstances, shall not be eligible to become a shareholder of a proposed wholly foreign-funded bank or a proposed Chinese-foreign joint venture bank:
(1)   having evident weakness or deficiency in its corporate governance structure and mechanism;
(2)   having a complex or an insufficiently transparent equity ownership structure;
(3)   having a large number of connected enterprises, or engaging in frequent or unusual connected transactions;
(4)   failing to identify the core business or having a business scope covering too many industrial sectors; and
(5)   any other circumstance that has a major adverse impact on the proposed bank.

Article 6  As referred to in Article 10 to Article 12 of the Regulations, the phrase “the end of the year prior to the submission of the application” refers to the end of the accounting year prior to the date of submitting the application; the requirement of “having the capital adequacy ratio that meets the requirements prescribed by the banking regulatory agency of the State Council” refers to the capital adequacy ratio of not lower than 8 per cent.

Article 7 “The feasibility study report” referred to in Article 14 of the Regulations and Article 15, Article 26 and Article 30 of these Rules, includes, but is not limited to, the following information: the basic information of the applicant, the market analysis of the proposed bank, the proposed business development plan, the proposed organizational structure, and the pro forma balance sheet and projected profits for the three years after the business commencement of the proposed bank.

“ The feasibility study report” referred to in Article 20 of the Regulations includes the following information: the basic information of the applicant, the purpose and the activity plan of the proposed representative office.

Article 8 “The name of the proposed bank” referred to in subparagraph (1) of Article 14 of the Regulations and “the name of the proposed representative office” referred to in subparagraph (1) of Article 20 of the Regulations, refer to both the Chinese name and the name in a foreign language.

The Chinese name of a branch or a representative office of a foreign bank shall indicate the nationality and form of liabilities of the foreign bank.

Article 9   As referred to in the Regulations and these Rules, the photocopy of the business license, the photocopy of the financial services permit, the power of attorney, or the guaranty letter issued by the foreign bank declaring its responsibility for all the taxes and other indebtednesses of its branch established within the territory of China shall be all notarized by the authorized notarization agency in the bank’s home country or region and authenticated by the embassy or consulate of the People’s Republic of China in such country or region.

    The CBRC may require, as it deems necessary, other documents submitted by the applicant to be notarized by the authorized notarization agency in the applicant’s home country or region and authenticated by the embassy or consulate of the People’s Republic of China in such country or region.

Article 10  The annual report referred in the Regulations and these Rules shall be audited and enclosed with the auditing opinions issued by the authorized accounting firm in the applicant’s home country or region. The annual report written in a language other than the Chinese or English language shall have the Chinese or English translation attached.

Article 11  An applicant applying to establish a foreign-funded bank for the first time shall provide an introduction to its home country or region’s financial system, together with a summary of the laws and regulations on financial supervision in its home country or region.

    A foreign bank applying to establish a representative office for the first time shall provide a proof document issued by a banking institution incorporated in the territory of China indicating that the two institutions have established a corresponding relationship.

Article 12   Where a foreign bank applies to establish an additional branch in the territory of China, it shall meet the requirements listed in Article 9 and Article 12 of the Regulations, and its existing branch(es) in the territory of China shall meet the prudential requirements prescribed by the CBRC.

   Where a foreign bank applies to establish an additional representative office in the territory of China, it shall meet the requirements listed in Article 9 of the Regulations, and its existing representative office(s) in the territory of China shall have no record of serious violations of laws or regulations.

Article 13   A wholly foreign-funded bank or a Chinese-foreign joint venture bank applying to establish a branch shall meet the prudential requirements prescribed by the CBRC.

Article 14  “The banking regulatory agency in the place where the proposed foreign-funded bank is to be established” referred to in Article 14, Article 17 and Article 20 of the Regulations, refers to the CBRC provincial office in the province where the proposed foreign-funded bank is to be established; “submit in due time” referred therein refers to submitting the application documents together with the examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

The application documents referred to in Article 14, Article 17 and Article 20 of the Regulations shall be sent at the same time to the CBRC local office in the place where the proposed bank, branch or representative office is to be located.

The application letter referred to in Article 14 and Article 20 of the Regulations shall be addressed to the Chairman of the CBRC and jointly signed by the chairman or the president (the CEO, the general manager) of each investor of the proposed wholly foreign-funded bank or the Chinese-foreign joint venture bank, or signed by the chairman or the president (the CEO, the general manager) of the parent bank of the proposed branch or representative office of a foreign bank.

Article 15   A wholly foreign-funded bank or a Chinese-foreign joint venture bank applying to establish a branch shall start with an application for preparation of the proposed branch and provide the following documents (each in two copies) to the CBRC provincial office in the province where the headquarters of the bank is located, with a copy of the documents being sent at the same time to the CBRC provincial office in the province where the proposed branch is to be established:

(1)   an application letter signed by the chairman or the president (the CEO, the general manager) of the applicant, which shall include, but be not limited to, the name and location of the proposed branch, the amount of operating capital to be allocated to the proposed branch, and the intended scope of business activities of the proposed branch;
(2)   a feasibility study report;
(3)   the articles of association of the applicant;
(4)   the annual report of the applicant;
(5)   the anti-money laundering systems of the applicant;
(6)   a photocopy of the applicant’s business license;
(7)   the resolution endorsed by the board of directors with regard to the establishment of the branch; and
(8)   other documents required by the CBRC.

     The CBRC provincial office in the province where the headquarters of the wholly foreign-funded bank or the Chinese-foreign joint venture bank is located shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

    The CBRC provincial office in the province where the proposed branch is to be established shall submit its examination opinion to the CBRC within 20 days from the date of receiving the application documents.

Article 16  The applicant applying to establish an operational foreign-funded bank shall, after receiving the notice for preparation approval, obtain a business commencement application form from the CBRC local office in the place where the proposed bank is to be established within 15 days from the date of receiving the approval notice and proceed with the preparation of the proposed bank. During the preparation period, the applicant shall set up a team responsible for the preparation and report the names of the team leaders to the aforementioned CBRC local office. When the preparation is completed, the team shall be dissolved automatically. The preparation period is six months.

     If the applicant fails to obtain the business commencement application form within the prescribed time limit, the CBRC or its provincial or local office shall not accept the application from the same applicant to establish an operational foreign-funded bank in the same Chinese city within one year from the date of approving the preparation by the applicant.

Article 17  The applicant applying to establish an operational foreign-funded bank shall complete the following work within the preparation period:

(1)   establishing a sound corporate governance structure (only applying to a wholly foreign-funded bank and a Chinese-foreign joint venture bank) and submitting a description of such corporate governance structure to the CBRC local office in the place where the proposed bank is to be established;

(2)   establishing an internal control system, including the internal organizational structure, the internal authorization policies and operational procedures for credit authorization and extension, loan management, treasury management, accounting practices, and the computerized information management system, and submitting such policies and operational procedures to the aforementioned CBRC provincial office or local office in the place where the proposed bank is to be established;

(3)   preparing an appropriate number of staff in accordance with the needs for business development, who have received training on relevant rules and regulations as well as professional knowledge, so that the proposed bank is able to effectively monitor the major business risks, implement the hierarchical authorization and review, adopt the division of responsibilities as well as the checks and balances among the key posts;

(4)   preparing the main business vouchers and documents used in business transactions, and submitting the samples of such vouchers and documents to the CBRC local office in the place where the proposed bank is to be established;

(5)   putting into place the security precautions that are approved by relevant authorities and submitting the photocopy of the approval document to the CBRC local office in the place where the proposed bank is to be established; and

(6)   hiring a qualified accounting firm legally incorporated within the territory of China to conduct the pre-business commencement audit on the internal control system, the accounting system, the computer system, etc. and submitting the audit report to the CBRC local office in the place where the proposed bank is to be established.

Article 18  Where an applicant applies for an extension of the preparation period, it shall submit the application, one month before the preparation period expires, to the CBRC local office in the place where the proposed bank is to be established. The application letter shall be signed by the leader of the preparation team.

       The aforementioned CBRC local office shall make a decision to approve or not approve the application within 15 days from the date of receiving the complete application documents, and notify the applicant of such decision in writing, with a copy of such decision sent at the same time level by level to the CBRC; if deciding not to approve the application, give the reasons thereof.

       Where an applicant fails to submit the application for an extension of the preparation period within the prescribed time limit, the aforementioned CBRC local office shall not accept such an application.

Article 19  When the preparation of a proposed operational foreign-funded bank is completed, the preparation team leader shall request for a pre-business commencement inspection to the CBRC local office in the place where the proposed bank is to be established. The inspection shall be conducted within 10 days from the date of receiving the request. If the applicant passes the inspection, it shall receive an inspection approval letter; if the applicant fails to pass the inspection, it shall receive a notice of inspection disapproval with the reasons provided thereof. The applicant may request a re-inspection to the aforementioned CBRC local office within 10 days from the date of receiving the notice of inspection disapproval. 

Article 20  The applicant shall, upon the completion of the preparation and the inspection, submit to the CBRC provincial office in the province where the proposed bank is to be established the inspection approval letter and the business commencement application letter signed by the leader of the preparation team, together with the application documents listed in Article 17 of the Regulations (each in two copies), with a copy of the documents sent at the same time to the CBRC local office in the place where the proposed bank is to be established.

    The aforementioned CBRC provincial office shall submit the application documents, the inspection approval letter, together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents from the applicant for business commencement.

Article 21   An operational foreign-funded bank shall, after receiving the business commencement approval, obtain the financial services permit in accordance with relevant provisions.

Article 22   An operational foreign-bank shall commence business within six months from the date of receiving the business license. In special circumstances, it may postpone the business commencement with the approval of the CBRC local office in the place where the proposed bank is to be established.

         Where an operational foreign-funded bank applies to postpone the business commencement, it shall submit an application to the aforementioned CBRC local office one month before the period allowed for business commencement expires. The application shall be signed by the chairman or the president (the CEO, the general manager) of the wholly foreign-funded bank or the Chinese-foreign joint venture bank, or by the president (the general manager) of the foreign bank branch.

        The aforementioned CBRC local office shall make a decision to approve or not to approve the application within 15 days from the date of receiving the application, and notify the applicant of such decision in writing, with a copy of such decision sent at the same time level by level to the CBRC; if deciding not to approve the application, give the reasons thereof.

        Where an applicant fails to submit an application for the postponement of business commencement within the prescribed time limit, the aforementioned CBRC local office shall not accept such an application.

       The extended period for business commencement shall not be longer than three months. If an operational foreign-funded bank fails to commence business within the time limit, the original business commencement approval shall automatically become void and the bank shall return the financial services permit to the CBRC. The CBRC or its provincial or local office shall not accept an application from the same applicant to establish an operational foreign-funded bank in the same Chinese city within one year from the date of the original business commencement approval becoming void.

Article 23   An operational foreign-funded bank shall, before business commencement, report in writing the scheduled date for business commencement to the CBRC local office in the place where the bank is to be established, and make a public announcement on business commencement in both a national newspaper designated by the CBRC and a local newspaper designated by the CBRC local office.

Article 24   Articles 15 to Article 19 of the Regulations and Article 16 to Article 23 shall apply to a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank.

Article 25    A foreign bank applying to convert its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank shall satisfy the requirements for the establishment of a wholly foreign-funded bank prescribed in the Regulations and these Rules, and shall have the capacity for long-term persistent operation within the territory of China and for effective management of the proposed bank.

Article 26    A foreign bank that intends to convert its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank shall apply for the preparation of the proposed wholly foreign-funded bank, and at the same time apply for converting the existing Chinese branches of the bank into the branches of the proposed wholly foreign-funded bank. In this respect, the foreign bank shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the headquarters of the proposed bank is to be located, with a copy of the application documents sent at the same time to each CBRC local office in the place where each of the foreign bank’s existing branches are located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the foreign bank, which shall include, but be not limited to,  the name and location of the proposed wholly foreign-funded bank and each of its branch, the amount of registered capital or the operating capital to be allocated, and the intended scope of business activities;

(2)   the feasibility study report and the conversion plan;

(3)   the draft articles of association of the proposed wholly foreign-funded bank, and the legal opinions issued on the draft articles of association by a legally incorporated law firm within the territory of China;

(4)   the resolution endorsed by the board of directors of the foreign bank to approve the conversion of the original Chinese branch into the proposed wholly foreign-funded bank solely funded by the parent bank;

(5)   a letter of consent signed by the Chairman or the president (the CEO, the general manager) of the foreign bank stating the consent to transferring the claims, indebtedness and taxes of the original branch to the proposed wholly foreign-funded bank, together with a commitment letter issued by the foreign bank for long-term persistent operation in China and for effective management of the proposed wholly foreign-funded bank;

(6)   the audited consolidated financial reports of all the existing Chinese branches of the foreign bank for the two years prior to the submission of the conversion application;

(7)   a written statement of opinions on the conversion issued by the financial regulatory authority in the foreign banks’ home country or region;

(8)   the foreign bank’s annual reports of the latest three years; and

(9)   other documents required by the CBRC.

The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

The CBRC shall, within six months from the date of receiving the complete application documents, make a decision to approve or not to approve the application, and notify the applicant of such decision in writing; if deciding not to approve the application for the conversion, give the reasons thereof. 

Article 27   A foreign bank that intends to maintain one branch undertaking foreign exchange wholesale business shall propose such an application when applying for the preparation for the proposed wholly foreign-funded bank.

      The original branch of the foreign bank shall determine the claims, indebtednesses and taxes to be taken over respectively by the proposed branch undertaking foreign exchange wholesale business and by the branch of the proposed wholly foreign-funded bank, and shall submit the list of the assets, liabilities and equity, together with an application letter addressed to the Chairman of the CBRC and signed by the Chairman or the president (the CEO, the general manager) of the applicant, as well as the application documents listed in Article 26 of these Rules to the CBRC provincial office in the province where the headquarters of the proposed wholly foreign-funded bank is to be located (each in two copies), with a copy of the documents sent at the same time to the CBRC local office in the place where the original branch of the foreign bank is located.

Article 28   A foreign bank that converts its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank may choose, with the approval of the CBRC and after consolidated capital verification, to convert the operating capital of the original branch into the registered capital of the proposed wholly foreign-funded bank, or to transfer the operating capital back to the parent bank.

Article 29   A foreign bank that converts its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank shall, upon the completion of the preparation and the related inspection approved, submit the inspection approval letter together with the following application documents to the CBRC provincial office in the province where the headquarters of the proposed wholly foreign-funded bank is to be located (each in two copies), with a copy of the documents sent at the same time to the CBRC local office in the place where the original branch of the foreign bank is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the preparation team leader of the proposed wholly foreign-funded bank, which shall include, but be not limited to, the names of the proposed bank and its branch(es) and sub-branch(es)’s name, their location, the registered capital and operating capital, and the intended scope of business activities;
(2)   a list of the assets, liabilities and equity to be transferred into the proposed wholly foreign-funded bank;
(3)   a verification certificate of registered capital issued by a qualified accounting firm legally incorporated within the territory of China;
(4)   the name-list of the proposed chairman and the general manager of the proposed wholly foreign-funded bank and of the general manager of each branch and sub-branch of the proposed wholly foreign-funded bank, their curriculum vitae, photocopies of their personal identification and academic degree certificates;
(5)   power of attorney for the proposed general manager of each branch and sub-branch of the proposed wholly foreign-funded bank;
(6)   a statement of clean record signed by the aforementioned proposed persons; and
(7)   other documents required by the CBRC.

      The aforementioned CBRC provincial office shall submit, within 20 days from the date of receiving the complete application documents for business commencement, submit the application documents together with its examination opinion to the CBRC.

      The CBRC shall, within two months from the date of receiving the complete application documents, make a decision to approve or not to approve the business commencement application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 30  A foreign bank that intends to maintain one branch undertaking foreign exchange wholesale business shall, at the time of applying for business commencement of the proposed wholly foreign-funded bank, submit the following application documents to the CBRC provincial office in the province where the headquarters of the proposed wholly foreign-funded bank is to be located (each in two copies), with a copy of the documents sent at the same time to the CBRC local office in the place where the original branch of the foreign bank is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the foreign bank, including, but be not limited to, the location of the branch to be maintained, the amount of operating capital, and the intended scope of business activities;
(2)   a feasibility study report;
(3)   a list of the assets, liabilities and equity of the branch to be maintained to undertake foreign exchange wholesale business;
(4)   a capital verification certificate issued by a qualified accounting firm legally incorporated within the territory of China; and
(5) other documents required by the CBRC.

The aforementioned CBRC provincial office shall, within 20 days from the date of receiving the complete application documents, submit the application documents together with its examination opinion to the CBRC.

     The CBRC shall, within two months from the date of receiving the complete application documents, make a decision to approve or not to approve the application for maintaining a branch undertaking foreign exchange wholesale business and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 31   A foreign bank that converts its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank shall, during the period of preparation for the establishment of the proposed wholly foreign-funded bank and upon registration of the bank, make a public announcement both in a national newspaper designated by the CBRC and in a local newspaper designated by the CBRC local office.

Article 32   A representative office of a foreign bank shall, after receiving the approval for establishment, register with the administrative department for industry and commerce in accordance with relevant provisions.

    The representative office shall, after completing the registration, make a public announcement of its establishment both in the national newspaper designated by the CBRC and in a local newspaper designated by the CBRC local office.

     A representative office shall move into its office premises within six months from the date of receiving the CBRC’s approval for its establishment. Where a representative office fails to open within six months, the original approval for its establishment will become void.

Article 33   A representative office of a foreign bank shall, after moving into its office premises, submit the following documents to the CBRC local office in the place where the representative office is located:

(1)   a form of basic information of the representative office;
(2)   a photocopy of the registration certificate issued by the administrative department for industry and commerce;
(3)   a description of the internal management systems of the representative office, including, but be not limited to, the set-up and division of responsibilities, and the internal reporting lines;
(4)   a photocopy of the leasing contract or the certificate of property rights for the office premises;
(5)   information on office equipments and the rental of data transmission lines from the telecommunication services providers;
(6)   samples of the official seals, document papers and staff’s business cards; and
(7)   other documents required by the CBRC.

Article 34  “Other documents” referred to in subparagraph (6) of Article 17 of the Regulations shall at least include the photocopies of the personal identification and academic degree certificate of the principal person-in-charge as well as a statement of clean record signed by the principal person-in-charge.

      The principal person-in-charge referred to in Article 17 of the Regulations and in the preceding paragraph refers to the chairman or the president (the CEO, the general manager).

Article 35   Where a wholly foreign-funded bank or a Chinese-foreign joint venture bank intends to change its registered capital, its shareholders or the equity holdings of its shareholders, or a foreign bank intends to change the operating capital of its branch(es) within the territory of China, it shall submit the following application documents to the CBRC provincial office in the province where the bank or the branch is located (each in two copies), with a copy of the application documents sent at the same time to the CBRC local office in the place where the operational foreign-funded bank is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   the resolution on such changes endorsed by the board of directors of the wholly foreign-funded bank or the Chinese-foreign joint venture bank;
(3)   the resolution on such changes endorsed by the board of directors of each investor of the wholly foreign-funded bank or the Chinese-foreign joint venture bank, or the statement of opinion on such changes signed by the legal representative of each investor. Where the equity transferor and the proposed recipient of such transfer by the wholly foreign-funded bank or the Chinese-foreign joint venture bank are financial institutions, the statement of opinion on such transfer issued by the financial regulatory authority of the home country or region shall be provided;
(4)   the equity transfer agreement or contract signed by relevant shareholders of the wholly foreign-funded bank or the Chinese-foreign joint venture bank; and
(5)   other documents required by the CBRC.

    The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

      The CBRC shall, from the date of receiving the complete application documents, make a decision to approve or not to approve the application within three months and notify the applicant of such decision in writing; if deciding not to approve, give the reasons thereof.

Article 36  An operational foreign-funded bank shall, when being approved to change the registered capital or the operating capital, or change the shareholders or the equity holdings of shareholders, hire a qualified accounting firm legally incorporated within the territory of China to conduct the capital verification within 30 days from the date of receiving the relevant approval letter from the CBRC, and submit the capital verification certificate to the CBRC local office in the place where the bank is located.

Article 37  Where a foreign bank intends to make changes to its branch(es) and representative office(s) established within the territory of China because of merger, acquisition, split or any other reason, it shall file a preliminary application with the CBRC by submitting the following documents:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the foreign bank; and
(2)   permission or the letter of approval on the merger, acquisition, split or any other activity issued by the financial regulatory authority of the foreign bank’s home country or region.

     The CBRC shall issue a letter of confirmation after receiving the complete application documents.

      The foreign bank shall, within five days from the date of the merger, acquisition, split or any other activity officially taking place, report to the CBRC as well as to the CBRC local office in the place where each Chinese branch of the foreign bank is located, and submit the following documents (each in two copies) to the CBRC within 30 days:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   the application form issued by the CBRC and filled out by the applicant;
(3)   the articles of association of the applicant;
(4)   the applicant’s organizational structure chart, the name-list of the members of its board of directors and of its major shareholders;
(5)   the guaranty letter signed by the chairman or the president (the CEO, the general manager) of the applicant to guarantee the payment of the taxes and indebtednesses of the Chinese branch(es);
(6)   the consolidated financial statement of the applicant;
(7)   the curriculum vitae and photocopies of the personal identification and academic degree certificate of the president (the general manager) of each Chinese branch of the applicant, or of the applicant’s chief representative in China;
(8)   power of attorney to the president (the general manager) of each Chinese branch, or to the chief Chinese representative of the applicant signed by the chairman or the president (the CEO, the general manager) of the applicant or by the person authorized by the applicant;
(9)   photocopies of the applicant’s business license or other approval documents permitting the applicant’s conduct of financial services, and the permit documents or the approval letter for the changes of the applicant issued by the financial regulatory authority of the applicant’s home country or region; and
(10) other documents required by the CBRC;

       The foreign bank shall, when submitting the preliminary and formal application documents on the changes to the CBRC, send a copy of the application documents at the same time to the CBRC local office in the place where the bank’s Chinese branch is located.

       The CBRC shall make a decision to approve or not to approve the application within three moths, and notify the applicant of such decision in writing; if deciding not to approve, give the reasons thereof.

Article 38  Where, for reasons other than the above, a foreign bank needs to change the name of its branch or representative office within the territory of China, it shall submit the following documents to the CBRC (each in two copies), with a copy sent to the CBRC local office in the place where the concerned branch or representative office of the foreign bank is located:

(1)  an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager);
(2)   photocopies of the business license or other approval documents permitting the applicant’s offer of financial services with the new name, and a letter of approval on the change of name issued by the financial regulatory authority of the applicant’s home country or region;
(3)   other documents required by the CBRC.

       The CBRC shall make a decision to approve or not to approve the application within three months from the date of receiving the complete application documents, and notify the applicant of such

decision in writing; if deciding not to approve, give the reasons thereof.

Article 39  Where an operational foreign-funded bank undergoes merger, acquisition or split, the new bank’s registered capital or operating capital, and the scope of business activities shall be re-approved by the CBRC.

Article 40   Where a wholly foreign-funded bank or a Chinese-foreign joint venture bank applies to change its name, it shall submit a letter of application (each in two copies) addressed to the Chairman of the CBRC and signed by its chairman or the president (the CEO, the general manager), with a copy of the application letter sent at the same time to the CBRC local office in the place where its headquarters is located. 

    The CBRC shall make a decision to approve or not to approve the application within three months from the date of receiving the complete application documents, and notify the applicant of such decision in writing; if deciding not to approve, give the reasons thereof.

Article 41   Where an operational foreign-funded bank or any of its branches applies to change its business premises within the same city, or a representative office of a foreign bank applies to change its office address within the same city, the following documents shall be submitted to the CBRC local office in the place where the applicant is located:

(1)   an application letter addressed to the aforementioned CBRC provincial office or local office and signed by the chairman or the president (the CEO, the general manager) of the wholly foreign-funded bank or the Chinese-foreign joint venture bank, or by the president (the general manager) of the foreign bank branch, or the chief representative of the foreign bank;
(2)   a photocopy of the intention letter for lease or purchase of the proposed business premises or the office premises of the applicant; and
(3)   other documents required by the CBRC.

       The aforementioned CBRC local office shall conduct inspection, in accordance with relevant provisions, on the proposed new business premises of the operational foreign-funded bank or of its branch. If the applicant passes the inspection, it shall receive an inspection approval letter from the aforementioned CBRC local office; if the applicant fails to pass the inspection, it shall receive a notice of inspection disapproval with the reasons provided thereof. The applicant may apply to the aforementioned CBRC local office for a re-inspection within 10 days from the date of receiving the notice of inspection disapproval.

       The aforementioned CBRC local office shall make a decision to approve or not to approve the application for changing the business premises or the office address within three months from the date of receiving the complete application documents, and shall notify the applicant of such decision in writing, with a copy of such decision submitted level by level to the CBRC; and if deciding not to approve the application, give the reasons thereof.

       The applicant shall not move into the new business premises or office premises before receiving the relevant approval from the aforementioned CBRC local office.

Article 42  Where a change occurs in the contents of its articles of association, a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall revise its articles of association within one year from the date of such change occurring. When applying to revise its articles of association, the applicant shall submit the following documents (each in two copies) to the CBRC provincial office in the province where the applicant is located, with a copy of the application documents sent at the same time to the CBRC local office in the place where the applicant is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;
(2)   the relevant resolution endorsed by the shareholders meeting or the board of directors of the applicant;
(3)   the applicant’s current articles of association and the draft of the new articles of association;
(4)   a table of comparison stating the changes of contents between the c, urrent and the new articles of association;
(5)   a letter of legal opinions on the revision of the articles of association issued by a qualified law firm legally incorporated within the territory of China; and
(6)   other documents required by the CBRC.

     The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

       The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 43   Where an operational foreign-funded bank decides to temporarily close its business for a period between three days and six months, it shall apply for temporary business close to the CBRC local office in the place where it is located, and provide the reasons for the temporary business close together with the arrangements during the period of temporary business close.

       The aforementioned CBRC local office shall, within ten days from the date of receiving the application for temporary business close, make a decision to approve or not to approve the application and notify the applicant of such decision; if deciding not to approve the application, give the reasons thereof.

       The applicant shall, when receiving the approval for the temporary business clo, se, make relevant public announcement outside its business premises.

Article 44  Where the approved period for the temporary business close expires or the reasons for the temporary business close become no longer valid, the bank under temporary business close shall resume its business. The same applicant applying for temporary business close shall, within five days from the date of its business resumption, report the business resumption to the CBRC local office in the place where the applicant is located. Where the applicant’s business premises are reconstructed, the applicant shall not resume its business until submitting to the aforementioned CBRC local office the photocopies of the intention letter for lease or purchase of the proposed business premises, together with the approval of the inspection on the security facilities and fire hydrant of the business premises.

          Where, in special circumstances, there is a need for exte, nding the period, of the te, mporary business , , close, the applicant shall re-apply in accordance with Article 43 of these Rules.

Article 45  Where an operational foreign-funded bank, under any of the circumstances listed in Article 27 of the Regulations, needs to change the contents of its financial services permit, it shall proceed with such change in accordance with the relevant rules for financial services permit.

         Where the capital verification is required, the operational foreign-funded bank shall submit to the CBRC local office in the place where it is located the capital verification certificate issued by a qualified accounting firm legally incorporated within the territory of China. Where an inspection is required, the aforementioned CBRC local office shall conduct the inspection.

         The operational foreign-funded bank shall, by presenting the approval document issued by the CBRC, register such change with the administrative department for industry and commerce and obtain a renewed business license.

          Where any of the circumstances listed in subparagraph (1) to (3) of Article 27 of the Regulations occurs, an operational foreign-funded bank shall make a public announcement both in a national newspaper designated by the CBRC and in a local newspaper designated by the CBRC local office. The public announcement shall be completed within 30 days from the effective date of the business license.

Article 46   Where a representative office of a foreign bank changes its name, office address, etc., it shall make a public announcement in a local newspaper designated by the CBRC local office in the place where the representative office is located after registering such change with the administrative department for industry and commerce.

Chapter Three  Scope of Business

Article 47  “The buying and selling of government bonds, financial bonds, foreign currency securities other than stocks” referred to in subparagraph (4) of Article 29 and subparagraph (4) of Article 31 of the Regulations includes, but is not limited to, the following foreign exchange investment activities: investment in Chinese and foreign government bonds, and the bonds of the Chinese financial and non-financial institutions issued outside the territory of China.

Article 48   “The credit information services and consultancy services” referred to in subparagraph (12) of Article 29 and subparagraph (11) of Article 31 of the Regulations refers to banking business related credit information services and consultancy services.

Article 49    A foreign bank branch conducting the foreign exchange businesses listed in Article 31 of the Regulations shall have an operating capital of no less than RMB200 million yuan or an equivalent amount in convertible currencies.

Article 50    A foreign bank branch conducting the foreign exchange businesses and RMB businesses listed in Article 31 of the Regulations shall have an operating capital of no less than RMB300 million yuan or an equivalent amount in convertible currencies, and the RMB-denominated proportion of the operating capital shall be no less than RMB100 million yuan.

Article 51    A wholly foreign-funded bank converted from a foreign bank branch within the territory of China and solely funded by its parent bank may conduct all the business activities formerly approved for the foreign bank branch.

Article 52    A wholly foreign-funded bank or a Chinese-foreign joint venture bank shall authorize its branches to conduct businesses within the scope of business approved for the bank.

         A foreign bank branch shall authorize its sub-branches in the same city to conduct businesses within the scope of business approved for the branch.

Article 53    The provisions of Article 34 of the Regulations refer to the requirements to be met by an operational foreign-funded bank when applying to engage in RMB businesses for the first time, with subparagraph (1) and (2) of the same Article providing that an operational foreign-funded bank applying to engage in RMB businesses shall have opened business for at least three years and been profitable for two consecutive years prior to the application. “Having opened business for at least three years” shall mean that it should be at least three years from the date when the operational foreign-funded bank obtains the approval of business commencement to the date when it submits the application to engage in RMB businesses. “Having been profitable for two consecutive years” shall mean that a profit is shown in the audited accounting report for two consecutive accounting years prior to the date of the application.

Where an operational foreign-funded bank that has been approved to engage in RMB businesses applies to expand the range of its RMB business clients, it shall satisfy the prudential requirements prescribed by the CBRC and be subject to the CBRC’s approval.

Article 54    A wholly foreign-funded bank or a Chinese-foreign joint venture bank applying to offer RMB businesses to the citizens within the territory of China shall, besides satisfying the prudential requirements prescribed by the CBRC, have business offices that are proper for its business characteristics and meet the needs of its business development.

Article 55    An operational foreign-funded bank applying to engage in RMB businesses or expanding the range of its RMB business clients shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the bank is located, with a copy of application documents sent at the same time to the CBRC local office in the place where the bank is located:
(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;
(2)   a feasibility study report;
(3)   the internal control system and the operating procedures for the proposed business;
(4)  the audited balance sheets and the income statements of the two  consecutive accounting years prior to the date of the application; and
(5)   other documents required by the CBRC.

           The aforementioned CBRC provincial office shall, within 20 days from the date of receiving the complete application documents, submit the application documents together with its examination opinion to the CBRC.

          The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 56   An operational foreign-funded bank shall, from the date of receiving the approval from the CBRC for engaging in RMB businesses or expanding the range of its RMB business clients, complete the following preparation work within four months:

(1)   having in place an appropriate number of staff with the expertise in consistency with the need of its business development;
(2)   having in place the important business vouchers and documents to be used in business transactions, and submitting the samples of these vouchers and documents to the CBRC local office in the place where the operational foreign-funded bank is located;
(3)   having in place the security precautions approved by the relevant authority, and submitting a copy of such approval to the CBRC local office in the place where the operational foreign-funded bank is located;
(4)   having in place the internal control systems and the operating procedures for RMB businesses and reporting such systems and procedures to the CBRC local office in the place where the operational foreign-funded bank is located; and
(5)   where an increase in registered capital or operating capital is needed, hiring a qualified accounting firm legally incorporated within the territory of China for capital verification, and submitting such capital verification certificate to the CBRC local office in the place where the operational foreign-funded bank is located.

         If the operational foreign-funded bank fails to complete the preparation work within four months, the previous approval issued by the CBRC shall automatically become void.

Article 57              An operational foreign-funded bank shall, upon the completion of the preparation work, request an inspection on the preparation work by the CBRC local office in the place where the bank is located. The aforementioned CBRC local office shall complete the inspection within 10 days from the date of receiving the request for the inspection. If passing the inspection, the operational foreign-funded bank shall receive an inspection approval letter; if failing to pass the inspection, the operational foreign-funded bank may request a re-inspection within 10 days from the date of receiving the notice of inspection disapproval.

         An operational foreign-funded bank shall, by presenting the inspection approval letter, obtain from the CBRC the letter of approval for conducting RMB businesses.

Article 58  A branch of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall conduct RMB businesses within the scope of business authorized by its headquarters. The branch shall undertake the preparation work in accordance with Article 56 of these Rules, and shall, upon the completion of the preparation work, submit to the CBRC local office in the place where the branch is located the authorization letter issued by the headquarters authorizing the branch to engage in RMB businesses.

           The aforementioned branch shall, upon the completion of the preparation work, request an inspection on the preparation work by the CBRC local office in the place where the branch is located. The inspection shall be completed within 10 days from the date of receiving the request for the inspection. If passing the inspection, the branch shall receive an inspection approval letter; if failing to pass the inspection, the branch may request a re-inspection within 10 days from the date of receiving the notice of inspection disapproval.

           The aforementioned branch shall, by presenting the inspection approval letter, obtain from the CBRC a confirmation letter for conducting RMB businesses, and renew its business license with the administrative department for industry and commerce.

Article 59   An operational foreign-funded bank or its branch approved to engage in RMB businesses or expand the range of its RMB business clients shall make a public announcement both in a national newspaper designated by the CBRC and in a local newspaper designated by the CBRC local office in the place where the bank is located.

Article 60   An operational foreign-funded bank applying to conduct any of the businesses listed in subparagraph (13) of Article 29 or subparagraph (12) of Article 31 of the Regulations shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the headquarters of the wholly foreign-funded bank or the Chinese-foreign joint venture bank, or the main reporting branch of the foreign bank is located, with a copy of the application documents sent at the same time to the CBRC local office in the place where the applicant is located:

(1)   an application letter addressed to Chairman of the CBRC and signed by the person authorized by the applicant;
(2)   a detailed description of the proposed business as well as the internal control system and the operating procedures for the proposed business; and
(3)   other documents required by the CBRC.

          The aforementioned CBRC provincial office shall, within twenty days from the date of receiving the complete application documents, submit the application documents together with its examination opinion to the CBRC.

          The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 61   Where an operational foreign-funded bank or its branch offers a new product within its approved scope of business, it shall, within five days from the date of offering the new product, submit a written report to the CBRC local office in the place where the bank or its branch is located. The report shall include, but be not limited to, the description and risk profile of the new product, the relevant internal control system and operating procedures.

Article 62   An operational foreign-funded bank may engage in long-term RMB inter-bank borrowing activities in accordance with relevant provisions.

Chapter Ⅳ Qualification Requirements

Article 63   A senior executive referred to in the Regulations and these Rules refers to an executive of a foreign-funded bank whose qualifications shall be reviewed and approved by the CBRC or by the CBRC provincial office in the province where the bank is located.

Article 64  The director, the senior executive or the chief representative of a foreign-funded bank shall be a natural person with full capacity for civil conduct and shall have the following qualifications:
(1)   familiar with and abiding by the Chinese laws, regulations and rules;
(2)   having the professional ethics, morality, integrity, reputation, a good compliance record and no record of misconduct;
(3)   having a university or higher educational background, having the professional knowledge, working experience and management capabilities required by his or her post; or, in the absence of the university or higher educational background, having over six years of working experience in financial activities or over eight years of working experience in the relevant economic activities (including over four years of working experience in financial activities); and
(4)   having the independence required by his or her post.

Article 65  The proposed director, senior executive or chief representative of a foreign-fund bank shall not assume his or her post before obtaining the qualification approval from the CBRC or the CBRC provincial office.

Article 66   A person under any of the following circumstances shall not be eligible to serve as the director, the senior executive or the chief representative of a foreign-funded bank:
(1)   having a criminal record for intentional or significant negligence of duty;
(2)   serving or having served as the director or the senior executive of an institution that is taken over, closed, acquired, bankrupt or revoked of business license due to illegal business operations, while an exception is provided for the person who is able to prove his or her innocence;
(3)   having instigated or participated in hampering or refusing the supervisory examination or investigation by the supervisory agency;
(4)   having caused material losses to or damaging impact on the institution at which he or she serves because of his or her violation of professional ethics or misconduct or significant negligence of duty;
(5)   having an outstanding debt of a large amount by himself or herself or by his or her spouse;
(6)   circumstances prohibited by laws, regulations and rules for holding such positions as the director, the senior executive or the chief representative in a financial institution; and
(7)   other circumstances prescribed by the CBRC.

Article 67  The CBRC shall be responsible for approving the qualifications of, or disqualifying, the following personnel that serve at a foreign-funded bank:

(1)   the chairman of the board, the president (the CEO, the general manager) of a wholly foreign-funded bank or a Chinese-foreign joint venture bank; the president (the general manager) of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank;
(2)   the president (the general manager) of a foreign bank branch; and
(3)   the chief representative of a representative office of a foreign bank.

Article 68   The CBRC provincial office is authorized by the CBRC to approve the qualifications for the replacement of the president of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank, the president (the general manager) of a foreign bank branch, and the chief representative of a foreign bank’s representative office within its jurisdiction.

Article 69   The CBRC provincial office shall be responsible for approving the qualifications of, or disqualifying, the following personnel that serve at a foreign-funded bank within its jurisdiction:

(1)   the directors, the vice chairman of the board, the board secretary, the vice president (the deputy general manager), the assistant president, the chief operating officer, the chief risk officer, the chief financial officer (the financial chief or the head of the financial function), the chief technology officer, the head of the internal audit and the head of compliance of a wholly foreign-funded bank or a Chinese-foreign joint venture bank;
(2)   the vice president (the deputy general manager) and the head of compliance of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank, the vice president (the deputy general manager) and the head of compliance of a foreign bank branch;
(3)   the head of a sub-branch; and
(4)   any other person who has a decision-making power in the bank’s business operations and management or plays a critical role in the bank’s risk control.

Article 70   The following directors, senior executives or the chief representative of a foreign-funded bank shall have the following qualifications:

(1)   the chairman of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall have over eight years of working experience in financial activities or over twelve years of working experience in relevant economic activities (including over five years of working experience in financial activities);(2)   the vice chairman of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall have over five years of working experience in financial activities or over ten years of working experience in relevant economic activities (including over three years of working experience in financial activities);
(3)   the president (the CEO, the general manager) of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall have over eight years of working experience in financial activities or over twelve years of working experience in relevant economic activities (including over four years of working experience in financial activities);
(4)   the board secretary, the vice president (the deputy general manager), the assistant president, the chief operating officer, the chief risk officer, the chief financial officer (the financial chief or the head of the financial function), the chief technology officer of a wholly foreign-funded bank or a Chinese-foreign joint venture bank, the president (the general manager) of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank or of a foreign bank shall have over five years of working experience in financial activities or over ten years of working experience in relevant economic activities (including over three years of working experience in financial activities);
(5)   the director of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall have over five years of working experience in relevant economic, financial, legal and accounting activities, who is able to utilize the financial and statistical statements to analyze the operation, management and risk profile of the bank, and understands the corporate governance structure, the articles of association, the board responsibilities as well as the rights and obligations of a director;
(6)   the vice president (the deputy general manager) of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank or of a foreign bank, or the head of a sub-branch shall have over four years of working experience in financial activities or over six years of working experience in relevant economic activities (including over two years of working experience in financial activities);
(7)   the heads of the internal audit and compliance of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall have over four years of working experience in financial activities;
(8)   the head of compliance of a branch of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank or of a foreign bank shall have over three years of working experience in financial activities; and
(9)   the chief representative of a representative office of a foreign bank shall have over three years of working experience in financial activities or over six years of working experience in relevant economic activities (including over one year of working experience in financial activities).

Article 71  A foreign-funded bank, when applying for the qualification approval of its directors, senior executives or the chief representative, shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the applicant is located, with a copy of the application documents sent at the same time to the CBRC local office in the place where the applicant is located:

(1)   an application letter addressed to the CBRC and signed by the person authorized by the applicant. Where the application is subject to the approval by the CBRC, the application letter shall be addressed to the Chairman of the CBRC, and where subject to the approval by the CBRC provincial office, the application letter shall be addressed to the Director General of the CBRC provincial office. An application letter shall specify the post, responsibilities and authority of the candidate as well as the position of his or her post in the hierarchy of the organizational structure of the applicant;
(2)   the power of attorney to the candidate signed by the authorized person of the applicant; and power of attorney to such authorized person;
(3)   photocopies of the personal identification and academic degree certificate of the candidate;
(4)   curriculum vitae of the candidate and a detailed description of his or her duty performance plan;
(5)   a statement of no record of misconduct and a statement of commitment to law-abiding practice and due diligence after appointment both signed by the candidate;
(6)   a relevant resolution endorsed by the meeting of board of directors or the shareholders’ meeting if the choice of candidate requires a board or shareholders’ meeting according to the articles of association of a wholly foreign-funded bank or a Chinese-foreign joint venture bank;
(7)   other documents required by the CBRC.

Article 72   Photocopies of the curriculum vitae, personal identification and academic degree certificate of the candidate referred to in the Regulations and these Rules shall be signed by the person authorized by the applicant.

Article 73   Where the candidate of a foreign-funded bank once served as a director, a senior executive or the chief representative in a banking institution within the territory of China, the CBRC or the CBRC provincial office in the province where such a bank is located may, when reviewing his or her qualifications, solicit opinions as needed from the CBRC provincial office in the province where the institution that the candidate formerly served is located.

         The CBRC provincial office in the province where the institution that the candidate formerly served is located shall provide relevant information in time.

Article 74   The CBRC or the CBRC provincial office in the province where a foreign-funded bank is located may, after receiving the application documents from the foreign-funded bank for qualification authorization, have an interview with the candidate prior to his or her appointment.

Article 75   Where the president (CEO, the general manager) of an operational foreign-funded bank, or the chief representative of the representative office of a foreign bank is absent from office for over one month, he or she shall present a written report to the CBRC local office in the place where the operational foreign-funded bank or the representative office is located, and a substitute shall be designated to fill in the post. And the above-mentioned personnel shall be replaced in case of absence from office for over three consecutive months without justified explanations.

Article 76   The CBRC or its provincial office or local office may disqualify a director, a senior executive or a chief representative for a period up to lifetime according to the severity if he or she is responsible for any of the following circumstances:

(1)   having been prosecuted for criminal offense;
(2)   refusing, interfering, hampering or seriously obstructing lawful supervision by the CBRC;
(3)   the circumstance where the institution that he or she serves suffers from significant property damages or losses or the occurrence of serious financial criminal cases because of inadequate enforcement or deficient internal management and control system;
(4)   the circumstance where the institution that he or she serves is taken over, acquired or declaring bankruptcy because of the serious violation of laws and regulations, inefficient internal controls or chronically poor management;
(5)   the circumstance where the institution that he or she serves suffers heavy losses because of chronically poor management;
(6)   the circumstance where the CBRC has discovered his or her illegal or rule-breaking behaviors or other circumstances taking place prior to his or her appointment that make it inappropriate for such person to assume the post; and(7)   other circumstances identified by the CBRC.

Article 77   Where an appointment of a candidate is subject to approval by the CBRC, the CBRC provincial office in the province where the applicant is located shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents. The CBRC shall make a decision to approve or not to approve the application within 30 days from the date of receiving the complete application documents and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

          Where an appointment of a candidate is subject to approval by the aforementioned CBRC provincial office, the provincial office shall make a decision to approve or not to approve the application within 30 days from the date of receiving the complete application documents and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Chapter V   Supervision and Regulation

Article 78  An operational foreign-funded bank shall put into place internal control system and operating procedures for business in line with its business development in China and report, by the end of March of each year, any amendments to such system and procedures to the CBRC local office in the place where the bank is located. 

Article 79   A wholly foreign-funded bank or a Chinese-foreign joint venture bank shall establish an independent department respectively responsible for risk management, compliance and internal audit.

A foreign bank branch shall designate a department or specific staff in charge of compliance.
Article 80   An operational foreign-funded bank shall, after the internal audit is completed, submit the internal audit report in time to the CBRC local office in the place where the bank is located. The aforementioned CBRC local office may communicate in appropriate ways with the bank’s internal auditors.

Article 81   An operational foreign-funded bank shall put into place a risk-based loan classification system and report to the CBRC local office in the place where the bank is located the relationship between its own criteria of loan classification and those required by the CBRC.

Article 82   The asset/liability ratio requirement referred to in Article 40 of the Regulations refers to the provisions of Article 39 of the Law of the People’s Republic of China on Commercial Banks.

A wholly foreign-funded bank or a Chinese-foreign joint venture bank shall calculate the asset/liability ratio on the RMB and foreign-currency consolidated basis in accordance with reporting requirements of the banking supervisory reporting system.

Article 83    A wholly foreign-funded bank or a Chinese-foreign joint venture bank shall put into place policies and procedures for the management of connected-party transactions to ensure that such transactions are on an arm’s-length basis and shall not enjoy more favorable terms than the transactions with non-connected parties.

The CBRC or its provincial or local office shall determine the nature of connected parties and connected transactions in accordance with the relevant rules governing the connected transactions by commercial banks. 

Article 84    An operational foreign-funded bank shall put into place the policies and procedures for the management of business outsourcing, including, but not limited to, the relevant decision-making procedures, evaluation and management of the service provider, the measures safeguarding information confidentiality and security as well as the business contingency plan.

An operational foreign-funded bank shall, before entering into the outsourcing contract, report to the CBRC local office in the place where the bank is located the major risks in the outsourcing contract and related risk-hedging measures.

Article 85   The interest-bearing assets referred to in Article 44 of the Regulations include the interest-bearing assets dominated both in RMB and foreign currencies.

Thirty per cent of the foreign exchange operating capital of a foreign bank branch shall be maintained in the form of foreign currency time deposits with a maturity of no less than six months as foreign exchange interest-bearing assets; thirty per cent of the RMB operating capital shall be maintained in the form of RMB government bonds or RMB time deposits with a maturity of no less than six months as RMB interest-bearing assets.

The above-mentioned interest-bearing assets in the form of time deposits shall be held at no more than three Chinese commercial banks within the territory of China that are recognized for sound performance and strong financial conditions. The foreign bank branch shall not be allowed to pledge and repurchase the interest-bearing assets in the form of RMB government bonds, or adopt any other solutions that may affect the control over the interest-bearing assets.

The foreign bank branch shall, respectively by the end of June and the end of December each year, report to the CBRC local office in the place where the branch is located the conditions of the interest-bearing assets, including the conditions of the deposit-taking banks, the amount, maturity and interest rate of the aforementioned time deposits as well as the amount, forms and maturity of the aforementioned government bonds.

The foreign bank branch shall obtain the approval from the CBRC local office in the place where the branch is located before it changes the forms, time-deposit-taking banks of its interest-bearing assets. The foreign bank branch shall not be allowed to change the conditions of interest-bearing assets without obtaining the approval from the aforementioned CBRC local office.

Article 86  “The operating capital plus reserves” referred to in Article 45 of the Regulations refers to the combined sum of the operating capital, retained earnings and the general provisions; and “the risk assets” referred to in Article 45 of the Regulations refers to the on- and off-the-balance sheet risk-weighted assets calculated in accordance with relevant provisions on risk-weighted assets.

The ratio provided for in Article 45 of the Regulations shall be calculated for each individual branch of the foreign bank within the territory of China, and assessed on the basis of the outstanding balance at the end of each quarter.

Article 87   The current assets of a foreign bank branch include cash, gold, deposits with the People’s Bank of China, inter-bank deposits, inter-bank placing due within one month, inter-bank lending due within one month, net asset balance of overseas intra-bank and affiliated transactions, interests receivable and other receivables due within one month, loans due within one month, bonds due within one month, bonds that can be liquidated any time on the secondary market at home and broad, and other assets that can be cashed in within one month. The expected uncollectible part shall be deducted from the above-mentioned assets. The interest-bearing assets shall not be included in current assets.

The current liabilities of a foreign bank branch include demand deposits, time deposits due within one month, inter-bank deposits, inter-bank borrowing due within one month, inter-bank borrowing due within one month, net liabilities balance of overseas intra-bank and affiliated transactions, interests payable and other payables due within one month, and other liabilities that shall become due within one month. Frozen deposits shall not be calculated in the current liabilities.

A foreign bank branch shall, on a daily basis, calculate and maintain the liquidity ratio provided for in Article 46 of the Regulations respectively in RMB and foreign currencies. The liquidity ratio of a foreign bank branch shall be examined by the CBRC on a solo-basis.

Article 88   The outstanding balance of the total domestic assets and liabilities denominated in both RMB and foreign currencies referred to in Article 47 of the Regulations is calculated as follows:

The total domestic assets denominated both in RMB and foreign currencies = Total assets denominated in RMB and foreign currencies – Overseas intra-bank transactions (assets) - Transactions with overseas affiliated institutions (assets) - Overseas loans – Overseas inter-bank deposits – Overseas inter-bank lending – Purchase of overseas repurchased assets - Overseas investment – Other overseas assets.

Overseas investment does not include the following: investment in bonds issued overseas the Chinese government, or by the Chinese financial institutions, or by the Chinese non-financial institutions.

The total domestic liabilities denominated both in RMB and foreign currencies = Total liabilities denominated in RMB and foreign currencies – overseas intra-bank transactions (liabilities) - Transactions with overseas affiliated institutions (liabilities) - Overseas deposits – Overseas inter-bank loans – Overseas inter-bank borrowing – Sale of overseas repurchased items – Other overseas liabilities.

The requirement in Article 47 of the Regulations on a foreign bank branch shall be examined by consolidating all the branches of the foreign bank within the territory of China.

Article 89    A foreign-funded bank shall truthfully record and report its assets, liabilities and owner’s equity.

Article 90    Where a foreign bank establishes two or more branches within the territory of China, the parent bank or the authorized regional head office of the foreign bank shall designate a local branch as the management branch, which is responsible for the overall management of the foreign bank’s operations within the territory of China and the reporting of the consolidated financial information and general information of all the branches within the territory of China.

The parent bank or the authorized regional head office of the foreign bank shall designate the president of the management branch to take charge of the overall management of all the branches within the territory of China and designate the head of compliance to take charge of compliance within the territory of China.

Article 91   An operational foreign-funded bank shall, at the end of each quarter, report to the CBRC local office in the place where the bank is located any of the large-value cross-border funds movements and assets transfer in accordance with the requirements of the CBRC.

Article 92   An operational foreign-funded bank shall apply for the approval of the CBRC local office in the place where the bank is located on an inward transfer of credit assets from the headquarters of the bank, or from the parent bank, or through the intra-bank transfer.

Article 93   A foreign bank branch under any of the following circumstances shall report to the CBRC local office in the place where the branch or its management branch is located:

(1)   the circumstance shall be reported at the end of each quarter where the combined sum of the branch’s retained earnings and current annual net income becomes negative, and the combined total of the absolute value of such negative sum and the loan loss provisioning gap exceeds 30 per cent of the branch’s operating capital;

(2)   the circumstance shall be reported at the end of each quarter where the balance of the branch’s credit to all its large clients exceeds eight times of the branch’s operating capital. Herein the large client refer to a client to whom the outstanding balance of credit exceeds 10 per cent of the branch’s operating capital. The ratio shall be calculated at the end of each quarter on a consolidated basis of all the branches of the foreign bank within the territory of China;

(3)   the circumstance shall be reported at the end of each month where the asset balance of the overseas intra-bank transactions and overseas transactions with affiliated institutions exceeds the combined total of the liability balance of the overseas intra-bank transactions and overseas transactions with affiliated institutions and the operating capital. Such balance shall be calculated on a consolidated basis of all the branches of the foreign bank within the territory of China; and

(4)   other circumstances prescribed by the CBRC.

Article 94    The special supervisory measures taken by the CBRC or its provincial or local office on an operational foreign-funded bank shall include the following:

(1)   engaging an executive of the bank in cautionary interviews;
(2)   ordering the bank to submit a written report on relevant issues within a prescribed time limit;
(3)   taking restrictive measures on capital outflow of the bank;
(4)   ordering the bank to suspend part of its businesses or suspending the acceptance of the application submitted by the bank for a new business;
(5)   ordering the bank to submit the letter of guaranty;
(6)   imposing special supervisory requirements on certain risk measurement ratios;
(7)   requesting the maintenance of a certain level of assets recognized by the CBRC;
(8)   ordering the bank to replenish capital or operating capital;
(9)   ordering the bank to replace its director or senior executive within a prescribed time limit;
(10) suspending the acceptance of the application submitted by the bank for setting up a new establishment;
(11) taking restrictive measures on profit distribution and outward profit remittance;
(12) sending special resident supervisors to the bank to provide supervisory guidance on the bank’s daily operations and management;
(13) increasing the frequency of supervisory reporting; and
(14) other special supervisory measures taken by the CBRC.

Article 95   An operational foreign-funded bank shall report in a timely manner the following events to the CBRC local office in the place where the bank is located:(1)   a major irregularity occurring in the bank’s f, inancial conditions and business activities;
(2)   a significant change in the bank’s business strategy;
(3)   except for Force Majeure, the temporary close of business by the bank for no more than two days other than on official holidays shall be reported to the aforementioned CBRC provincial office or local office seven working days prior to the close;
(4)   an important resolution endorsed by the board of directors of a wholly foreign-funded bank or a Chinese-foreign joint venture bank;
(5)   a change in the articles of association, or the registered capital, or the registered address of the parent bank of a foreign bank branch, or of the shareholders of a wholly foreign-funded or of a Chinese-foreign joint venture bank;
(6)   merger, spilt and other major reorganization, or the change of the chairman or the president (the CEO, the general manger) of the parent bank of a foreign bank branch, or of the shareholders of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank;
(7)   a major irregularity occurring in the financial conditions or business activities of the parent bank of a foreign bank branch, or of the shareholders of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank;
(8)   a major default or violation uncovered involving the parent bank of a foreign bank branch, or the shareholders of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank;
(9)   a major supervisory measure taken by the home country or region supervisory authority on the parent bank of a foreign bank branch, or on the foreign shareholders of a wholly foreign-funded bank or of a Chinese-foreign , joint venture bank, or on the bank’s other overseas establishments;
(10) a major change in the supervisory laws and regulations and the financial supervisory system in the home country or region of the parent bank of a foreign bank branch, or of the foreign shareholders of a wholly foreign-funded bank or of a Chinese-foreign joint venture bank; and
(11) other events that shall be reported as required by the CBRC.

Article 96   A representative office of a foreign bank shall report in a timely manner the following events involving the foreign bank it represents to the CBRC local office in the place where the representative office is located:
(1)   a change in bank’s articles of association or registered capital or registered address;
(2)   merger, spilt and other major reorganization of the bank or the change of the bank’s chairman or president (the CEO, the general manger);
(3)   a major irregularity occurring in the bank’s financial conditions or business activities;
(4)   a major default or violation uncovered;
(5)   a major supervisory measure taken by the bank’s home country or region supervisory authority; and
(6)   other major events that have material impact on the bank’s business operations.

Article 97  A foreign-funded bank shall report to the CBRC local office in the place where it is located if a person other than its regular staff within the territory of China works in the bank for more than 20 consecutive days or for more than 30 days out of 90 days in a cumulative basis. 

Article 98   A wholly foreign-funded bank, a Chinese-foreign joint venture bank, or a foreign bank with two or more branches within the territory of China shall, at the end of each accounting year, hire a qualified accounting firm legally incorporated within the territory of China to conduct annual auditing on the basis of consolidating all the bank’s operations within the territory of China, and submit the auditing report with management improvement suggestions to the CBRC local office in the place where the headquarters of the wholly foreign-funded bank or the Chinese-foreign joint-venture bank, or the management branch of the foreign bank is located within four months from the end of the accounting year.

A foreign bank branch shall, at the end of each accounting year, hire a qualified accounting firm legally incorporated within the territory of China to conduct annual auditing, and submit the auditing report with management improvement suggestions to the CBRC local office in the place where the branch is located within four months from the end of the accounting year.

Article 99   An operational foreign-funded bank shall submit the basic information of the accounting firm it hires and of the certified public accountants to be involved in the auditing to the CBRC local office in the place where the bank is located one month before the annual auditing or other auditing is conducted.

Article 100  The annual auditing conducted on a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall include, but be not limited to, the following: capital adequacy, asset quality, corporate governance, internal controls, profitability, liquidity and market risk management.

          The annual auditing conducted on a foreign bank branch shall include, but be not limited to, the following: financial statements, risk management, operational controls, compliance and asset quality.

Article 101  The CBRC or its provincial or local office may, where necessary, designate an accounting firm to conduct auditing on an operational foreign-funded bank with respect to the bank’s operations, financial conditions, risk conditions, internal controls and the enforcement of such controls.

Article 102  The CBRC or its provincial or local office may request an operational foreign-funded bank to replace the accounting firm whose expertise and independ, ence fail to satisfy the relevant supervisory requirements.

Article 103    A wholly foreign-funded bank and a Chinese-foreign joint venture bank shall, within six months from the end of each accounting year, submit respectively their own annual reports and the annual reports of their shareholders to the CBRC local office in the place where the headquarters of the bank is located.

A foreign bank, branch and a f, oreign bank r, epresentative offic, e shall, within six months from the end of accounting year of the parent bank, submit the annual report of the parent bank to the CBRC local office in the place where the branch or the representative office is located.

 Article 104   A foreign bank representative office shall, before the end of February of each year, submit its annual work report for the preceding year together with a work plan for the current year to the CBRC local office in the place where the representative office is located in accordance with the format required by the CBRC.

Article 105    A foreign bank representative office shall have independent office premises, office equipment and full-time staff.

Article 106    A foreign bank representative office shall have an appropriate number of staff. The posts of its staff shall be consistent with the responsibilities of the representative office.

Article 107    A foreign bank representative office shall establish its accounting book to truly reflect its financial conditions, including revenues and expenditures. And the costs and expenditures of the representative office shall be reasonable and consistent with the responsibilities of the representative office.

A foreign bank representative office shall not use the account of any other enterprise, organization or individual.

Article 108    A foreign bank representative office shall not utilize in its computer system any business processing systems beyond the scope of responsibilities of the representative office.

Article 109    All the documents required by these Rules, with the exception of the annual reports, if prepared in a foreign language, shall be submitted together with the Chinese translation thereof. The documents regarding the internal control system, operating procedures as well as the samples of business vouchers for an operational foreign-funded bank shall have Chinese translation attached. Other relevant documents in business and management files shall have Chinese translation if the supervisors deem necessary. The CBRC or its provincial or local office may require, under special circumstances, the Chinese translation be notarized by the authorized notarization agency in bank’s home country or region and authenticated by the embassy or consulate of the People’s Republic of China in such country or region.

Chapter Six     Termination and Liquidation

Article 110    The termination referred to in Article 58 of the Regulations shall include the following circumstances:

(1)   the circumstance where the operation period provided for in the articles of association of a wholly foreign-funded bank or a Chinese-foreign joint venture bank expires or other reasons for dissolution provided for in the articles of association arise;
(2)   the circumstance where the shareholders’ meeting or the board of directors of a wholly foreign-funded bank or a Chinese-foreign joint venture bank decides on a dissolution;
(3)   the circumstance where the dissolution is necessitated due to the merger or split of a wholly foreign-funded bank or a Chinese-foreign joint venture bank; and
(4)   the circumstance where a foreign bank, a wholly foreign-funded bank or a Chinese-foreign joint venture bank closes its branches within the territory of China.

Article 111    A wholly foreign-funded bank or a Chinese-foreign joint venture bank applying for a dissolution shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the applicant is located, with a copy being sent at the same time to the CBRC local office in the place where the applicant is located:
(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president  (the CEO, the general manager) of the applicant;
(2)   the resolution on the dissolution endorsed by the bank’s shareholders meeting or the board of directors;
(3)   a confirmation letter on the dissolution jointly signed by the chairman or the president (the CEO, the general manager) of each shareholder of the applicant; and
(4)   other documents required by the CBRC.

The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve, give the reasons thereof.

Article 112  A foreign bank, a wholly foreign-funded bank or a Chinese-foreign joint venture bank applying for closing its branch within the territory of China shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the branch is located, with a copy sent at the same time to the CBRC provincial office in the province where the headquarters of the wholly foreign-funded bank or the Chinese-foreign joint venture bank is located, or to the CBRC local office in the place where the branch is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   the resolution to close the branch within the territory of China endorsed by the board of directors of the wholly foreign-funded bank or the Chinese-foreign joint venture bank;
(3)   a written statement of opinion on the application issued by the financial regulatory authority in the foreign bank’s home country or region; and
(4)   other documents required by the CBRC.

The CBRC provincial office in the province where the branch is located shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve, give the reasons thereof.

Article 113   From the effective date of the decision of the CBRC to approve the dissolution of a wholly foreign-funded bank or a Chinese-foreign joint venture bank, or the closing of a branch by a foreign bank, a wholly foreign-funded bank or a Chinese-foreign joint venture bank, the institution to be dissolved or closed shall cease business operations immediately and return its financial services permit promptly, and set up a liquidation team within 15 days from the aforementioned effective date.

Article 114   Members of the liquidation team shall include the president (the general manager), the chief accountant, the certified public accountant in the territory of China, as well as other personnel designated by the CBRC. The liquidation team of a wholly foreign-funded bank or a Chinese-foreign joint venture bank shall also contain representatives of the shareholders and the chairman of the board of directors. The composition of the liquidation team shall be submitted to the CBRC local office in the place where the foreign-funded bank is located for the approval.

Article 115   The liquidation team shall give a written notice on the liquidation to relevant departments, including the administrative department for industry and commerce, the taxation authority, and the department of labor and social security.

Article 116   Other liquidation matters related to the dissolution of a wholly foreign-funded bank or a Chinese-foreign joint venture bank, or the closure of branch within the territory of China by a foreign bank, a wholly foreign-funded bank or a Chinese-foreign joint venture bank, shall comply with the relevant provisions of the Corporate Law of the People’s Republic of China.

Article 117   The CBRC local office in the place where the dissolved or closed operational foreign-funded bank or its branch is located shall be responsible for supervising the process of dissolution and liquidation, and shall report the significant events and results of liquidation level by level up to the CBRC.

Article 118   The liquidation team shall hire a qualified accounting firm legally incorporated in China to conduct auditing within 30 days from the date of the establishment of the liquidation team; and shall, within sixty days from the date of hiring the accounting firm, submit the auditing report to the CBRC local office in the place where the dissolved or closed operational foreign-funded bank or its branch is located.

Article 119   Matters related to foreign exchange approval or verification during the dissolution or liquidation process shall be subject to approval by the State Administration of Foreign Exchange or its local office.

Article 120   During the process of debt liquidation, the liquidation team shall, after paying off liquidation cost, staff salaries and labor insurance due, give the priority to the payment of the principals and interest of individual savings deposits.

Article 121   The liquidation team shall, before the tenth day of each month, submit reports on debt liquidation, asset disposal, loan collection, account closing, etc. to the CBRC local office in the place where the foreign-funded bank under liquidation is located.

Article 122   Where the liquidation team is to withdraw interest-bearing assets after completing debt liquidation, it shall obtain the approval from the CBRC local office in the place where the foreign-funded bank under liquidation is located by submitting the following documents:

(1)   an application letter signed by the head of the liquidation team;
(2)   a report on the liquidation work; and
(3)   other documents required by the CBRC.

Article 123   The liquidation team shall prepare a liquidation report upon completion of the liquidation work, which shall be submitted for verification to the CBRC local office in the place where the foreign-funded bank under liquidation is located, and then submitted to the administrative department for industry and commerce for de-registration. The liquidation team shall also make a public announcement in both the national newspaper designated by the CBRC and the local newspaper designated by the aforementioned CBRC provincial office or local office. The contents of such a public announcement shall be reported to the aforementioned CBRC provincial office or local office three days before it is issued.

Article 124   The handling of post-liquidation accounting archives and business documents shall comply with relevant rules and regulations.

Article 125   After liquidation of a foreign bank branch, the CBRC or its provincial or local office shall not, within two years from the date of completing the liquidation, accept an application from the same foreign bank to establish an operational foreign-funded bank in the same Chinese city.

Article 126   A foreign bank applying for closing its branch in a Chinese city and establishing a representative office in the same city shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the proposed representative office is to be established, with a copy being sent at the same time to the CBRC local office in the place where the proposed representative office is to be established:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   power of attorney to the proposed chief representative signed by the person authorized by the foreign bank;
(3)   the curriculum vitae of the proposed chief representative;
(4)   photocopies of the personal identification and academic certificate of the proposed chief representative;
(5)   a statement of a clean record signed by the proposed chief representative; and
(6)   other documents required by the CBRC.

The aforementioned CBRC provincial office shall, within 20 days from the date of receiving the complete application documents, submit the application documents together with its examination opinion to the CBRC.

The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 127  Where a wholly foreign-funded bank or a Chinese-foreign joint venture bank is found operating in violation of laws and regulations or with poor management, which, if is not closed, may cause serious damage to the financial order or the interests of the general public, the CBRC shall close the bank in accordance with the Regulations on the Closure of Financial Institutions.

Where the CBRC orders the closing of a foreign bank branch, such closing shall be proceeded in accordance with the Corporate Law of the People’s Republic of China.

Article 128    Where a wholly foreign-funded bank or a Chinese-foreign joint venture bank is under liquidation due to dissolution, and the liquidation team finds, after completing the assets check-up and compilation of the balance sheet and the assets list, that the assets of the bank are not enough for debt payment, it shall, with the consent from the CBRC, immediately submit an insolvency application to the People’s Court. Once the wholly foreign-funded bank or the Chinese-foreign joint venture bank is declared insolvent pursuant to the verdict made by the People’s Court, the liquidation team shall hand over the liquidation work to the People’s Court.

Article 129    A wholly foreign-funded bank or a Chinese-foreign joint venture bank applying to resume business in accordance with Article 59 of the Regulations shall submit the following application documents to the CBRC provincial office in the province where the bank is located, with a copy being sent at the same time to the CBRC local office in the place where the bank is located:
(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   a resolution on resuming business endorsed by the board of directors of the wholly foreign-funded bank or the Chinese-foreign joint venture bank ; and
(3)   other documents required by the CBRC.

The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents,

The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 130   Where a foreign bank applying to convert its existing branch within the territory of China into a wholly foreign-funded bank solely funded by its parent bank, the existing branch of the foreign bank shall return the financial services permit and go through the procedures for de-registration with the administrative department for industry and commerce within ten days from the date of receiving the approval for business commencement of the wholly foreign-funded bank.

Article 131   A foreign bank applying for closing its representative office in China shall submit the following application documents (each in two copies) to the CBRC provincial office in the province where the representative office is located, with a copy being sent at the same time to the CBRC local office in the place where the representative office is located:

(1)   an application letter addressed to the Chairman of the CBRC and signed by the chairman or the president (the CEO, the general manager) of the applicant;(2)   other documents required by the CBRC.

The aforementioned CBRC provincial office shall submit the application documents together with its examination opinion to the CBRC within 20 days from the date of receiving the complete application documents.

The CBRC shall, within three months from the date of receiving the complete application documents, make a decision to approve or not to approve the application and notify the applicant of such decision in writing; if deciding not to approve the application, give the reasons thereof.

Article 132   The representative office of a foreign bank that is closed with approval shall, within 15 days from the date of completing the deregistration, make a public announcement both in a national newspaper designated by the CBRC and a local newspaper designated by the CBRC local office in the place where the representative office is located, and report the contents of such a public announcement to the aforementioned CBRC local office.

Chapter Seven Supplementary Provisions

Article 133   The foreign-funded banks in violation of these Rules shall be penalized by the CBRC in accordance with the Regulations and other relevant provisions.

Article 134   These Rules shall be effective as of December 11, 2006.  The Rules for Implementing the Regulations of the People’s Republic of China on Administration of Foreign-funded Financial Institutions promulgated by the CBRC on July 26, 2004 shall be repealed simultaneously.