The Asia Global Payment Summit. Bali, Indonesia. 10-11 October 2019

China Banking Regulatory Commission

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The China Banking Regulatory Commission (中国银行业监督管理委员会) (CBRC) is the banking sector regulator for the central government of the People’s Republic of China.

It is one of China’s chief financial regulators alongside the China Insurance Regulatory Commission, the China Securities Regulatory Commission and the People’s Bank of China, which are collectively referred to as the “One Bank and Three Commissions” (一行三会).

CBRC is authorised by the State Council to supervise and regulate banks, asset management companies, trust and investment companies and other depository financial institutions in China, as well as maintain the lawful and stable operation of the Chinese banking sector.

CBRC was established on 25 April 2003 as a ministerial institution directly under the State Council, and underwent a major organisational reform at the start of 2015.

Work Goals

According to its official website CBRC’s regulatory work goals are to “protect the interests of depositors and consumers in general by means of prudential and effective regulation; increase market confidence by means of prudential and effective regulation; advance the general public’s understanding of modern finance by means of promotional and educational work and related information disclosures; strive to reduce financial malfeasance.”

History

During the period from 1984 to 2003 China implemented a two tier-banking system comprised of the People’s Bank of China – China’s central bank, and the specialised banks.

Under this system PBOC was essentially China’s sole financial authority, responsible for the comprehensive regulation of the banking sector, the securities sector, the insurance sector and the trust sector.

At the start of 2003 Beijing implemented arrangements for the establishment of a separate banking regulator that would be independent of PBOC.

The first meeting of the National People’s Congress committee that year gave its approval to the “State Council Notice Concerning Institutional Establishment” (国务院关于机构设置的通知) (Guofa [2003] No. 8), which outlined the creation of CBRC as a ministerial institution directly under the State Council.

CBRC was established on 25 April 2003 and commenced formal operation several days later on 28 April 2003, taking over the regulatory role of PBOC with respect to banking sector financial institutions, as well as certain functions of China’s Central Financial Work Commission (中共中央金融工作委员会).

The assumption of PBOC’s regulatory role involved the reorganisation of key offices including its first department (一司), second department (二司), the non-banking department (非银司), the cooperation department (合作司) and the bank administration department (银行管理司).

Under CBRC these departments were reconfigured into – the first regulatory department , responsible for state-owned commercial banks; the second regulatory department, responsible for joint-stock commercial banks; the third regulatory department, responsible for foreign-invested and policy banks, and the non-bank financial institution regulatory department and cooperative financial institution regulatory department, responsible for trust companies, leasing companies, asset management companies and other institutions.

At the time of its establishment in 2003 the chief functions of CBRC as outlined by the “Provisions Concerning CBRC’s Chief Functions, Internal Institutions and Personnel System” (中国银行业监督管理委员会主要职责内设机构和人员编制规定) were as follows:

  1. Draft rules systems and measures in relation to the supervision and regulation of banking sector financial institutions; draft relevant laws and administrative regulations, and propose their formulation and amendment.
  2. Approve the establishment, amendment, termination and business scope of banking sector financial institutions and their branches.
  3. Perform on-site and off-site supervision and regulation of banking sector financial institutions; lawfully perform sanction of conduct in breach of regulations and the law.
  4. Inspect the professional qualifications of senior executives in banking sector financial institutions.
  5. Responsible for the unified formulation of national banking sector financial institution data and financial statements, and send duplicates to the People’s Bank of China, as well as release them publicly in accordance with the relevant provisions of the state.
  6. Submit emergency risk handling opinions and proposals for depository financial institutions in conjunction with the Ministry of Finance, the People’s Bank of China and other departments.
  7. Responsible for daily regulatory work in relation to key stat-owned banking sector financial institution boards.
  8. Undertake other matters as assigned by the State Council.

CBRC had a total of 15 internal departments at the time of its establishment, including the:

  1.  The general affairs office (办公厅).
  2. The policy and law department (政策法规部).
  3. The first banking regulatory department (银行监管一部).
  4. The second banking regulatory department (银行监管二部).
  5. The third regulatory department (银行监管三部).
  6. The non-banking financial institution regulatory department (非银行金融机构监管部).
  7. The cooperative financial institution regulatory department (合作金融机构监管部).
  8. The statistics department (统计部).
  9. The accounting department (财务会计部).
  10. The international department (国际部).
  11. The supervisory and inspection department (监察局).
  12. The human affairs department (人事部).
  13. The media department (宣传工作部).
  14. The mass work department (群众工作部).
  15. The board work department (监事会工作部).

The new regulator had a total of 450 personnel upon its establishment, including 120 members of staff from the abrogated Central Financial Work Commission and 200 members of staff from PBOC’s five banking regulatory departments.

By 19 October 2003 CBRC had completed the establishment of all of its province-level subordinate offices.

On 20 January 2015 CBRC announced its first organisational reforms since its establishment nearly 13 years previously.

These included the creation of a separate trust department from the non-banking financial institution regulatory department, for the specialised regulation of trust sector financial institutions andthe creation of a separate municipal bank regulatory department from the second banking regulatory department, responsible for the regulation of municipal commercial banks, municipal credit unions and private banks

CBRC also established a new financial inclusion department, that would be responsible for weak links in the financial system, such as the provision of micro-enterprise or rural loans, and unlicensed institutions that provide micro-loans, online loans and guarantees.

Official Responsibilities

As of 22 January 2013 CBRC’s official responsibilities as outlined by its website are as follows:

  1. Formulate and promulgate rules and systems for the supervision and regulation of banking sector financial institutions and their business activities in accordance with laws and administrative regulations.
  2. Examine and approve the establishment, amendment, termination and business scope of banking sector financial institutions in accordance with the conditions and procedures stipulated by laws and administrative regulations.
  3. Implement management of the professional qualifications of the directors and senior executives of banking sector financial institutions.
  4. Formulate prudential operation regulations for banking sector financial institutions in accordance with laws and administrative regulations.
  5. Conduct off-site inspection and regulation of the business activities of banking sector financial institutions; establish a banking sector financial institution supervisory and regulatory information system; analyse and evaluate the risk conditions of banking sector financial institutions.
  6. Conduct on-site inspections the business activities and risk conditions of banking sector financial institutions, formulate on-site inspection procedures, and standardise on-site inspection conduct.
  7. Perform consolidated supervision and regulation of banking sector financial institutions.
  8. Establish a banking sector sudden contingency handling system in cooperation with relevant departments; formulate banking sector sudden contingency handling plans, clarify the handling institutions and personnel as well as their duties, handling measures and handling procedures, and promptly and effectively handle banking sector sudden contingencies.
  9. Responsible for unified formulation of national banking sector financial institution statistical data and financial reports, and their public release in accordance with the relevant provisions of the state.
  10. Performance of guidance and supervision of the activities of the banking sector’s independent disciplinary organisations.
  11. Undertake relevant international exchanges and cooperative activities in relation to banking sector supervision and regulation.
  12. With respect to credit crises that have occurred or could potentially occur, perform take over or expedite the reorganisation of banking sector financial institutions whose depositors and other clients have seen their lawful rights and interests severely impacted.
  13. Abolish banking sector financial institutions that are operating in breach of the law or suffer from poor business management and other such conditions.
  14. Investigate the accounts of banking sector financial institutions suspected of financial malfeasance, as well as those of their staff and affiliates.
  15. Combat illicitly established banking sector financial institutions and illegal participation in banking sector financial institution business activities.
  16. Responsible for the day-to-day management work of key state-owned banking sector financial institution boards.
  17. Undertake other matters as assigned by the State Council.

Organizational Structure

As of the end of 2016 CBRC employed over 570 staff, and had established the following internal offices.

  1.  The general affairs office (办公厅).
  2. The policy research department (政策研究局).
  3. The prudential regulation department (审慎规制局).
  4. The on-site inspection department (现场检查局).
  5. The legal and regulatory department (法规局).
  6. The financial inclusion department (普惠金融部).
  7. The information technology department (信科部).
  8. The innovation department (创新部).
  9. The consumer protection department (消保部).
  10. The policy bank department (政策银行部).
  11. The large-scale bank department (大型银行部).
  12. The joint stock bank department (股份制银行部).
  13. The municipal bank department (城市银行部).
  14. The rural finance department (农村金融部).
  15. The foreign invested bank department (外资银行部).
  16. The trust department (信托部).
  17. The non-bank financial institution department
  18. The accounting department
  19. The international department
  20. The supervisory department.
  21. The human resources department
  22. The public relations department
  23. The institutional party commission.

CBRC is comprised of four separate organisational tiers, at the top of which is CBRC’s headquarters, located in Beijing at 15 Beijing Financial Street.

In the second tier CBRC has established a total of 36 banking regulatory bureaus (银监局) in China’s 31 province-level administrative units, as well as the cities of Dalian, Ningbo, Xiamen, Qingdao and Shenzhen.

At the third tier it has established 306 banking regulatory sub-bureaus in regions around China, and in the fourth tier a total of 1730 regulatory offices at the county-level.

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