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    CBIRC Issues Licensing Requirements for Chinese Commercial Banks

    April 14, 2023

    The China Banking and Insurance Regulatory Commission (CBIRC) issued the application materials catalog and format requirements for administrative licensing of Chinese-funded commercial banks, published a Notice, along with questions and answers (Q&As), for classification and regulation of trust companies, released a Notice on promoting key tasks of rural revitalization in 2023, and announced results of the three-year action plan to improve corporate governance in the banking and insurance industries.

    Below is a summary of the recent updates:

    • CBIRC issued application materials catalogue and format requirements to improve the standardization and effectiveness of administrative licensing work. As a next step, CBIRC will continue to deepen the reform of "decentralization, regulation and service", actively implement various measures to optimize the business environment, and continuously improve the standardization and facilitation of administrative licensing work of Chinese-funded commercial banks.
    • The Notice on rural revitalization in 2023 requires the banking and insurance industries to strengthen the construction of rural financial service capabilities, improve the rural financial service system, build hierarchical institutional service system with complementary advantages, deepen the construction of the internal exclusive mechanism of banking institutions, and increase the inclination of internal resources in agriculture-related finance. The Notice aims to strengthen the post-loan management of agricultural credit, prevent agricultural credit risks, avoid excessive credit, illegal fees, etc., and strengthen the promotion and dissemination of financial knowledge in rural areas. The Notice requires continuous strengthening of supervision and assessment guidance, and a steady increase in agriculture-related credit investment.
    • The Notice on trust business classification aims to clarify the boundaries of trust business and service content, guide trust companies to take advantage of institutional advantages and industry competitiveness in a standardized manner, promote the high-quality development of the trust industry, and help build a modern socialist country. The functions of various trust businesses can be classified as asset services, asset management, and public welfare and charity based on the nature of trust services. Going forward, CBIRC will guide trust companies to improve their internal management systems in accordance with the requirements of this Notice, refine the classification standards in light of regulatory requirements and company business characteristics, and conduct comprehensive and accurate classification of trust business based on the nature of trust services. The Notice will come into effect on June 01, 2023.
    • The results of three-year action plan to improve corporate governance show that the organic integration of party leadership and corporate governance has been deepened further, issues related to ownership structure, shareholder equity and related transactions has been resolved, steady improvement was recorded in the performance of government entities, along with improvements in incentive and restraint mechanism, internal risk control and external supervision mechanism and safeguarding the legitimate rights and interests of stakeholders.


    Related Links (in Chinese)

    Keywords: Asia Pacific, China, Banking, Credit Risk, Basel, Rural Credit, Agricultural Lending, Bank Licenses, CBIRC

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