Online Banking in the PRC: Legal Progress to Date

June 02, 2002 | BY

clpstaff &clp articles

The Provisions Relevant to the Implementation of the Circular (the Provisions) seek to clarify certain aspects of last year's Administration of Online Banking Services Tentative Procedures (the Procedures). New information have been added to the Procedures.

By Philip Gilligan, Partner and Athena Wong, Associate, Lovells

Since the mid-1990s, some Chinese banks have offered online banking services to their customers (who are mostly state enterprises and institutions) in large cities. Banks have also teamed up with telecommunications service providers to jointly launch business-to-consumer online banking systems. While overseas financial service providers see that online banking will be critical to the growth of e-commerce in China, nothing more than initial preparations could be done during the 1990s due to the lack of supporting legislation to regulate these new industries. Thus, the Procedures received a warm welcome when they were immediately put into effect on promulgation on June 29 2001.1 As is typically the case in China, implementation of the legislation has uncovered issues that require fine-tuning, and the Provisions have therefore been issued this year to address such issues.

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