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    Chinese Authorities Publish Multiple Regulatory Updates for Banks

    January 29, 2022

    The People’s Bank of China (PBC) and the State Administration of Foreign Exchange (SAFE) jointly released a notice on matters concerning overseas lending by banking institutions, with the notice coming into effect on March 01, 2022. The notice establishes a policy framework for the integrated management of overseas loans that are issued by banks and denominated in either RMB or foreign currencies. The notice incorporates the cross-border capital flows associated with overseas lending by banks into the macro-prudential management policy framework. It also specifies the requirements for banks on overseas lending transactions and cross-border fund use to ensure effective risk prevention. Additionally, PBC, the China Banking and Insurance Regulatory Commission (CBIRC), and the China Securities Regulatory Commission (CSRC) jointly released administrative measures on customer due diligence by financial institutions, with the effective date of March 01, 2022. The measures require institutions to apply enhanced due diligence in high-risk scenarios and allow simplified due diligence for transactions or customers assessed as having low risks. CBIRC also published guidance on digital transformation of banking and insurance sectors, along with the related questions and answers (Q&A).

    The guidance on digital transformation covers strategic planning and organizational process development, digitalization of business operation and management, data capacity building, technological capacity building, and risk prevention. The guidance highlights that banking and insurance institutions should:

    • strengthen top-level design and overall planning as well as improve organizational structure and mechanism processes
    • actively develop industrial digital finance, promote the digital transformation of personal financial services, improve the level of digitalization of financial market transactions, and build a digital operation service system
    • improve data governance systems, enhance data management capabilities, strengthen data quality control, and improve data application capabilities
    • increase the flexible supply of data center infrastructure, improve the support capacity of scientific and technological architecture, promote the agile transformation of scientific and technological management, and improve the application of new technologies and their independent and controllable capabilities
    • strengthen the management of strategic, liquidity, operational, and outsourcing risks as well as enhance network security, data security, and privacy protection


    Keywords: Asia Pacific, China, Banking, Insurance, Securities, Lending, Cross Border Activities, Credit Risk, Customer Due Diligence, Operational Risk, Digital Transformation, Regtech, Suptech, Fintech, PBC, CBIRC

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