The China Banking and Insurance Regulatory Commission (CBIRC) issued a "Decision" amending certain administrative licensing regulations for Chinese-funded commercial banks, small and medium-size rural banking institutions, and foreign-funded banks. The "Decision" will come into force on October 08, 2022.
The amendments include reducing the scope of examination and approval for the qualifications of bank executives, optimizing the scope and mechanism for the examination and approval of bank issuance of bonds, and revising some clauses in accordance with the principle of consistency between China and foreign countries. The amended Article 65 states that "State-owned commercial banks, Postal Savings Bank, and joint-stock commercial banks apply for capital instruments." The planned issuance quota of non-capital debt instruments, including the total loss-absorbing capacity of global systemically important banks, shall be accepted, reviewed, and decided by CBIRC, which shall make a written decision of approval or disapproval within 3 months from the date of acceptance. Moreover, "a city commercial bank's application for the planned issuance quota of capital instruments shall be accepted, reviewed and decided by the local provincial dispatched office. The local provincial dispatched office shall make a written decision of approval or disapproval within 3 months from the date of acceptance." " Commercial banks can independently determine the specific instrument variety, issuance time, batch, and scale within the approved quota, and complete the issuance within 24 months after approval.
With respect to the amendments to the approval of bank bond issuance, state-owned commercial banks, postal savings banks, and joint-stock commercial banks shall report to CBIRC within 10 days after the issuance of non-capital bonds while the city commercial banks shall report to the local provincial agency within 10 days after the issuance of non-capital bonds. Another requirement is to clarify the issuance mechanism of capital bonds. Relevant institutions can independently determine the specific instrument types, issuance time, batches, and scales within the approved quota. Institutions should complete the issuance within 24 months after approval. The "Decision" is intended to promote the streamlining of administration and decentralization, optimize the banking market access procedures, and build a consistent system of market access rules inside and outside the country.
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Keywords: Asia Pacific, China, Banking, Bank Licenses, Basel, TLAC, Regualtory Capital, CBIRC
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