State Administration of Foreign Exchange, Verification of Short-term Foreign Debt Indicators of Foreign-invested Banks in China for the Year 2005 Circular

Issued: January 26 2005
Effective: April 1 2005
Applicability: In the event of a conflict between this Circular and relevant provisions of the People's Bank of China, Improving the Administration of Renminbi Loans Secured by Foreign Exchange Circular and the State Administration of Foreign Exchange, Issues Concerning Implementation of the «Administration of Foreign Debts of Foreign-invested Banks in China Proceduresz» Circular, this Circular shall prevail (Section 4 (7)).

Main contents: The 2005 verification of short-term foreign debt indicators of foreign banks shall be implemented in strict accordance with the relevant principles and requirements in the Administration of Foreign Debts of Foreign-invested Banks in China Procedures, and shall also take into consideration (1) changes in the balance of all foreign exchange loan items of the foreign-invested bank within the last two years (in particular, the latter half of 2004); (2) the short-term foreign debt indicators of the foreign-invested bank after the adjustment in November 2004 and the actual balance of short-term foreign debts as at the end of the year; and (3) the business development plan of the foreign-invested bank for the year 2005 (Section 1(2)). The State Administration of Foreign Exchange (SAFE) shall implement control on the total amount of short-term foreign debts of the foreign-invested banks under the jurisdiction of various foreign exchange administrations. Foreign exchange administrations may, within the approved range of short-term foreign debt balance and in accordance with specific circumstances of foreign debts and changes in bank business of various foreign-invested banks under their respective jurisdiction, properly adjust the short-term foreign debt indicators thereof (Section 2(1)). A branch of a foreign-invested bank qualified as a principal reporting branch may, subject to authorization of its superior branch and verification of the foreign administration at the place where it is located, apply for a short-term foreign debt indicator as a principal reporting branch with the foreign exchange administration at the place where it is located (Section 2(3)). Foreign-invested banks in regions that have not yet been open to renminbi services may continue to provide foreign exchange guarantees to renminbi loans borrowed by foreign-invested enterprises at the locality (Section 4(1)). Business of renminbi loans secured by foreign exchange previously done shall be handled in accordance with the People's Bank of China, Improving the Administration of Renminbi Loans Secured by Foreign Exchange Circular, and separate subsequent registration procedures will not be required (Section 4(6)).
Related legislation: Administration of Foreign Debts of Foreign-invested Banks in China Procedures; State Administration of Foreign Exchange, Issues Concerning the Implementation of the«Administration of Foreign Debts of Foreign-invested Banks in China Proceduresz» Circular, 2004 and People's Bank of China, Improving the Administration of Renminbi Loans Secured by Foreign Exchange Circular, July 15 1999, CLP 1999 No.7 p24