CBIRC published the "Administrative Measures on Financial Services for Banking and Insurance Institutions in Response to Emergencies," which will be implemented from the date of issuance. CBIRC has, in conjunction with the relevant departments, issued targeted policies and measures in response to the epidemic to ensure continuity of basic financial services and promote bancassurance institutions to support the real economy to resume development as soon as possible. The bancassurance institutions shall establish and improve the emergency response management system and management system within six months from the date of implementation of these measures and report to the bancassurance regulatory agency. CBIRC also published key questions and answers related to the measures.
The measures implement the basic concepts of combining support for the real economy with maintaining the soundness of the financial system, providing convenient financial services with effective risk prevention, and adherence to the bottom line of prudential supervision and flexible response to emergencies. The bancassurance institutions mentioned in these measures refer to banking financial institutions and insurance companies. The banking financial institutions mentioned in these measures refer to financial institutions established within the territory of the People's Republic of China, such as commercial banks, rural credit cooperatives, and other financial institutions that absorb public deposits as well as development financial institutions and policy banks.
The measures clarify the definition of emergencies, the basic principles of response, and the organization and management system arrangements. The measures emphasize the need to maintain the bottom line of risk while providing financial services and financial support. Emphasis is placed on strengthening pre-loan review and post-loan management; preventing customers from improperly obtaining, using financing facilities, or preferential conditions; preventing multiple and excessive credit extensions; and preventing misappropriation of financing. Banking financial institutions shall, for loans that meet the provisions on loan reduction, exemption, and write-off, strictly follow procedures and conditions for loan reduction or write-off, do a good job in loan collection management and asset preservation, and effectively safeguard legal financial claims. The measures require institutions to conduct business retrospective and post-assessment in a timely manner, strictly prevent behavior that violate the legal rights of customers, and strengthen public opinion monitoring, management, and response.
The measures also stipulate that CBIRC can actively adjust regulatory indicators and temporarily exempt bancassurance institutions from taking regulatory measures or imposing administrative penalties. It is also emphasized that bancassurance institutions must not take the opportunity to distribute dividends and distribute or increase the remuneration packages of "directors, supervisors, and senior managers."
Related Links (in Chinese)
Effective Date: Issuance Date
Keywords: Asia Pacific, China, Banking, Insurance, Governance, Remuneration Practices, Dividend Distribution, Business Continuity, COVID-19, Credit Risk, CBIRC
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleFED Revises Information Collection Under Market Risk Capital Rule
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.