Public Notice of the CBRC on Further Opening up China’s Banking Industry

(December 5, 2005)

 

In a bid to honor China’s WTO commitments and improve standard of opening up to the outside world, China Banking Regulatory Commission (CBRC) is herein making the following announcements on further opening up China’s banking industry:

 

I.         Effective on December 5, 2005, foreign-funded financial institutions are permitted to engage in renminbi businesses in additional two cities of Shantou, and Ningbo. At the same time, in order to encourage the foreign-funded financial institutions to participate in the strategy of developing west China and revitalizing northeast China as well as other old industrial bases, another five cities, namely, Harbin, Changchun, Lanzhou, Yinchuan and Nanning, with the approval of the State Council, are also opened to the foreign-funded financial institutions ahead of the schedule (thus bringing the number of opened cities from 18 to 25). From then on, foreign-funded financial institutions located in these cities may apply to conduct renminbi businesses. The application shall be prepared in compliance with the Regulation of the People’s Republic of China Governing Foreign-funded Financial Institutions (hereinafter referred to as the Regulation) and the Rules for Implementing the Regulation of the People’s Republic of China Governing Foreign-funded Financial Institutions (hereinafter referred to as the Implementation Rules). The application shall be filed with the relevant CBRC local office for preliminary review and then be forwarded to the CBRC headquarters for final approval. The foreign-funded financial institutions that have been licensed to operate renminbi businesses are automatically allowed to conduct renminbi businesses in the above seven cities.

 

II.       The CBRC decides to lower minimum operating capital requirements for foreign banks in China to conduct renminbi businesses to an appropriate level: 1) for a foreign bank branch to conduct renminbi businesses with all kinds of customers (including Chinese individuals), the minimum operating capital requirement for the highest level is reduced from RMB500 million to RMB400 million; and, 2) for a branch of either a wholly-foreign-funded bank or a Sino-foreign joint-equity bank to conduct renminbi businesses with all kinds of customers, the minimum operating capital requirement is reduced from RMB300 million to RMB200 million.

 

III.      The CBRC will make further study of relaxing market entry criteria for foreign banks to conduct renminbi businesses in the central, western and northeastern area of China and will continuously support the foreign banks’ application to set up establishments or businesses in these regions.

 

IV.   According to the Regulation, the CBRC will in 2006 make some adjustments to the proportion of the foreign exchange deposits taken within Chinese territory by a foreign-funded financial institution in its total foreign exchange assets within Chinese territory.

 

 

 

 

 

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Copyright: China Banking Regulatory Commission
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