People's Bank of China, Verification for Entry of Financial Institutions in the Banking Industry into the National Interbank Loans Market Rules

Promulgated: January 21 2005
Effective: as of date of promulgation
Interpreting authority: People's Bank of China (PBOC)
Applicability: Financial institutions in the banking industry that wish to engage in interbank borrowings but have not yet entered the national interbank loans market shall report to the branches, business administration departments and provincial capital urban sub-branches of the PBOC where they are located for the record.
"Financial institutions in the banking industry" refers to such financial institutions that take deposits from the public as commercial banks, urban credit cooperatives, and rural credit cooperatives that are established within the PRC, as well as policy banks (Article 2).

Main contents: According to the Rules, foreign-invested commercial banks applying for entry into the interbank loans market shall have obtained the approval of the banking regulatory authority of the State Council for the right to conduct renminbi business (Article 3). Applications for entry into the interbank loans market by the head office of foreign-invested commercial banks whose legal person organizations are established in China and the branches and sub-branches of foreign-invested commercial banks whose legal person organizations are established outside China shall be made to the branches or sub-branches of the PBOC at the place where they are located. The applications are subject to the approval of the head office of the PBOC after the approvals by the branches of the PBOC at each relevant level (Article 10). Foreign-invested commercial banks whose legal person organizations are established in China shall launch interbank borrowings using legal person as the work unit, and their branches and sub-branches may not engage in interbank borrowings (Article 12). Financial institutions in the banking industry may, out of their own free will, apply to the PBOC for withdrawal from the interbank loans market (Article 20).
Related legislation: PRC Administrative Licensing Law; PRC People's Bank of China Law (Revised), Dec 27 2003, CLP 2003 No.1 p4; PRC Commercial Banking Law (Revised), Dec 27 2003, CLP 2003 No.1 p4 and People's Bank of China, Administrative Licensing Implementing Procedures