China Banking Regulatory Commission, Tentative Measures on the Administration of Working Capital Loans

中国银行业监督管理委员会流动资金贷款管理暂行办法

April 16, 2010 | BY

clpstaff &clp articles &

Lenders to supervise the use of working capital loans.

Clp Reference: 3510/10.02.12 Promulgated: 2010-02-12 Effective: 2010-02-12

Promulgated: February 12 2010

Effective: as of date of promulgation

Interpreting authority: China Banking Regulatory Commission

Applicability: The Measures apply to the operation of working capital loans by banking financial institutions approved to be established within the PRC by the China Banking Regulatory Commission (the Lenders) (Article 2).

The term “working capital loans” refers to loans in a domestic or foreign currency granted by the Lender to enterprises and public institutions with legal personality or other organisations that may be borrowers according to state provisions for working capital requirement for day-to-day production and other business operations (Article 3).

Main contents: Lenders shall implement uniform credit management for working capital loans on the borrowers and the clients of the group to which the borrowers belong, and shall establish a system for management of risk limits for different districts, industries and loan types (Article 7). Working capital loans may not be used for investment in fixed assets or equity, may not be used for production or other business operations of sectors or purposes that are prohibited by the state and may not be misappropriated. Lenders shall check and supervise the use of working capital loans according to the stipulations of the contract (Article 9).

Related legislation: PRC Banking Regulation Law (Revised), Oct 31 2006; and PRC Commercial Banking Law (Revised), Dec 27 2003

clp reference:3510/10.02.12promulgated:2010-02-12effective:2010-02-12

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