The CBRC Issued Guidelines on Regulating the Banking Industry in Serving Enterprises’ Overseas Development and Strengthening Risk Control


The Silk Road economic belt and the 21st century maritime Silk Road are important strategic decisions against the background of intricate changes in the global situation, as well as coordination of domestic and international trends. In the recent years, the CBRC actively supports Chinese banks to improve the capability of cross-border financial service and optimizes the layouts of institutions overseas, especially in countries along the Belt and Road. Up till now, Chinese banks have established over 200 branches overseas. And 9 Chinese banks set up 62 branches in 26 Belt and Road countries. In light of supervisory cooperation, the CBRC has signed MOU or cooperative agreements with financial supervisory authorities from 67 countries and areas. Among 64 Belt and Road countries, the CBRC has signed MOU or cooperation agreements with financial supervisory authorities from 27 countries. To further implement strategies put forward by the Party Central Committee and the State Council of co-building the Belt and Road and promoting international capacity cooperation, regulating the banking industry in serving enterprises "going global" and strengthening various categories of risk prevention and control, the CBRC has recently issued the Guidelines on Regulating the Banking Industry in Serving Enterprises’ Overseas Development and Strengthening Risk Control (hereinafter referred to as the “Guidelines”).


The Guidelines comprise 7 parts of General Requirements, Credit Risk Management, Country Risk Management, Compliance Risk Management, Environmental and Social Risk Management, Optimization of institutions overseas and Enhancement of Supervision. In face of the key problems, weak links, and major risks of banking institutions in serving “going global”, the Guidelines put forward a series of detailed supervisory requirements so as to strengthen regulation on strategic positioning, risk prevention and institutional layouts of banking financial institutions.


For banking financial institutions serving enterprises "going global", the Guidelines put forth clear strategic positioning, strengthen service in key fields, require banks to enrich financial service modes, improve corporation governance, and strengthen risk management. The CBRC also encourages virtuous competition, and strives to improve the accountability system and guarantee capability.


The Guidelines provide guidance on credit risk management of banking institutions in terms of credit granting, due diligence, independent loan examining, post-loan management, guarantee management, reasonable risk sharing. The Guidelines highlight that banking financial institutions shall adhere to the principles of “independence, comprehensiveness, deepness and prudence”, and strengthen due diligence and risk assessment of overseas businesses; meanwhile, banks are required to guard against risks of cross-border M&A loans and guarantee business.


The Guidelines stress the importance of compliance risk management and require banking financial institutions to strengthen compliance system construction and daily compliance management, optimize compliance resource allocation, make comprehensive assessment of customers, reinforce compliance management of anti-money laundering and anti-terrorist financing, and improve the efficiency of regulatory communication.


With regard to the management weakness of environmental and social risks of overseas business, the Guidelines require banking financial institutions to implement whole-process management of environmental and social risks, protect local residents' rights, promote communication and interaction with stakeholders, and strengthen related information disclosure. When providing project financing and trade financing service, banks are required to pay special attention to the environmental and social risk in the fields of energy resources, agriculture, forestry, animal husbandry and fishery, major infrastructure and project construction.





Copyright: China Banking Regulatory Commission
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