China Banking Regulatory Commission, Matters Relevant to Further Opening up the Banking Industry Notice

Issued: November 24 2004

Main contents: The Notice specifies the policies and measures to be taken by the China Banking Regulatory Commission (CBRC) in further opening up the banking industry. Starting from December 1 2004, the areas where foreign-invested financial institutions are permitted to engage in renminbi business will be extended to the five cities of Kunming, Beijing, Xiamen, Xi'an and Shenyang (Item One). Also starting from December 1 2004, the CBRC will loosen the profitability requirements when examining the applications for operating renminbi business filed by branches of foreign banks in western and northeast China; i.e., the current practice of examining the profit of every single branch will be replaced by examining the consolidated profit of all the branches in China of the applicant (Item Two). Also, the CBRC will, under identical conditions, give priority to the examination and approval of applications of foreign-invested banks for establishing organizations and launching business in western and northeast China (Item Three). Starting from December 1 2004, a foreign-invested financial institution applying for the establishment of a representative office in China may submit the application materials directly to the CBRC and at the same time send a copy to the CBRC agency at the locality where the proposed office is to be located. The CBRC authorizes its local bureaux to examine and verify the qualifications of new chief representative replacements of representative offices of foreign-invested financial institutions within their respective jurisdictions (Item Four). Starting from January 1 2005, foreign-invested banks are permitted, after record filing with the CBRC agency at the locality, to engage in insurance agency service in accordance with relevant provisions within the approved group of customers and business scope (Item Five).
Related legislation: PRC Administration of Foreign-funded Financial Institutions Regulations, Dec 20 2001, CLP 2002 No.1 p5 and PRC Administration of Foreign-funded Financial Institutions Regulations Implementing Rules, Jul 26 2004