People's Bank of China, Relevant Questions in Implementing the «Commercial Bank Auxiliary Services Tentative Provisions» Circular

Issued: April 22 2002

Main contents: The Circular in its appendix classifies auxiliary services into nine primary categories, each with secondary and, in some cases, tertiary sub-categories. Commercial banks are required to break down their auxiliary services to the secondary sub-category level for the purpose of application for approval. Once a bank has obtained the approval from the People's Bank of China (PBOC) for provision of a primary category of auxiliary services, no further PBOC authorization will be required for the bank to add any sub-category services under the same primary category in the future (Section One). Commercial banks are required to classify their current auxiliary services in accordance with the classification detailed in the Circular or according to their own classification and report the results to PBOC. If a bank is offering services for which it has not obtained PBOC approval, it shall apply to PBOC for approval (Section Two). For the time being, commercial banks are not allowed to offer securities brokerage services (Section Three). Commercial banks are required to set up a regular report system for auxiliary services (Section Four). Urban and rural credit cooperatives are permitted to offer auxiliary services (Section Five). Policy banks may enter the auxiliary service business following the system and procedure for wholly State-owned commercial banks but the scope of their auxiliary services is to be stipulated under separate cover (Section Six).
Related legislation: Commercial Bank Auxiliary Services Tentative Provisions, Jun 21 2001, CLP 2001 No.6 p5