China revises regulations on foreign banks
The revision of implementation measures, issued by the China Banking and Insurance Regulatory Commission on Dec 18, became effective since the day it was released.
After soliciting public opinions for a draft of the implementation measures earlier this year, the CBIRC lifted the restriction that limited the scope of business of foreign banks to wholesale banking, which refers to the provision of services by banks to larger customers or organizations such as corporate and institutional clients, while they established branches and subsidiaries in China simultaneously.
The revised implementation measures, on the other hand, allow foreign bank branches to choose their business direction based on a clear functional positioning, said the regulator in a media note posted on its website on Wednesday.
Regarding the suggestions made by certain banking institutions on clarifying the prerequisites for foreign bank subsidiaries and branches to share their systems, staff members and management, and clarifying the standards and procedures to waive requirements on the renminbi working capital adequacy ratio of foreign bank branches, the regulator said these will be clarified in proper forms after the release of the implementation measures.
The CBIRC set prerequisites for foreign banks to establish subsidiaries and branches in China simultaneously and added regulatory requirements accordingly. It removed the total asset requirement for foreign banks to set up institutions in China and obtain regulatory approval for conducting renminbi business.
The regulator also said it will assess the interest-earning assets ratio, the renminbi working capital adequacy ratio and the liquidity ratio of a foreign bank's branches combined, rather than a singular foreign bank branch.
Foreign bank branches are also required to hold interest-earning assets designated by the CBIRC that is worth at least 5 percent of their public debt, but they do not need to increase interest-earning assets if the outstanding volume of their interest-earning assets reached 30 percent of their working capital, according to the implementation measures.
- GLOBALink | China is playing increasingly important role in mathematics: Artur Avila
- China's e-commerce logistics index up in 2023
- UNESCO IISTEM to improve sci-tech innovation talent training in China: education ministry
- GLOBALink | China launches new air cargo route linking Shenyang, Chicago
- Participants from 154 countries, regions, int'l organizations to join 6th CIIE: vice commerce minister