China Banking Regulatory Commission, Tentative Provisions on the Restructuring of Microfinance Companies into Rural Banks

中国银行业监督管理委员会小额贷款公司改制设立村镇银行暂行规定

October 10, 2009 | BY

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Restructuring of a microfinance company into a rural bank requires a bank promoter.

Clp Reference: 3610/09.06.09 Promulgated: 2009-06-09 Effective: 2009-06-09

Issued: June 9 2009
Effective: as of date of issuance

Main contents: To restructure into a rural bank, a microfinance company shall fulfil the following criteria:

(1) more than two-thirds of the shareholders with voting rights consent to the restructuring at a shareholders' (general) meeting;

(2) it has been established in accordance with the Guiding Opinion on Pilot Microfinance Companies and in continuous operations for at least three years;

(3) it has been profitable consecutively for the most recent two financial years;

(4) the non-performing loan ratio is less than 2%;

(5) its adequacy ratio of loan loss provision is at least 130%;

(6) its net assets are more than its paid-in capital;

(7) the ratio of the balance of agricultural loans to that of total loans in the most recent four quarters has been no less than 60%; and

(8) a qualified financial institution in the banking industry has been confirmed to be the principal promoter (Article 4).

Related legislation: Implementing Measures on the Administrative Licensing Items for Rural Small and Medium Financial Institutions, Jun 27 2008; Tentative Provisions for the Administration of Rural Banks, Jan 22 2007; and Guiding Opinion on Pilot Microfinance Companies, May 4 2008

clp reference:3610/09.06.09promulgated:2009-06-09effective:2009-06-09

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