CBRC Issued the Regulation on Agricultural Development Bank of China

 

The Report of the 19th CPC National Congress stressed the necessity of deepening the financial system reform, enhancing the system’s capacity of supporting the real economy, improving the financial regulatory system, and forestalling systemic financial risks. In line with the spirit of the Congress, and to implement the plan on deepening the policy bank reform, strengthen areas of weakness of the regulatory system, and guard against and resolve the financial risks under the new situation, the CBRC recently issued the Regulation on Agricultural Development Bank of China (hereinafter referred to as "the Regulation").

 

The Regulation was issued to meet the needs of enhancing the reform of Agricultural Development Bank of China (hereinafter referred to as ADBC), further strengthening areas of weakness of its regulation and supervision, and also of improving financial regulation as well as risk prevention and control.

 

The Regulation highlights ADBC’s position as a policy financial institution to serve national strategies and instructs it to provide sound financial services for key and weak areas of agriculture and rural development. Meanwhile, the Regulation also emphasizes on market-based operation and compliance with the general rules governing the banking industry.

 

The Regulation consists of 9 Chapters with 70 Articles: General Provisions, Market Positioning, Corporate Governance, Risk Management, Internal Control, Capital Management, Incentives and Restraints, Supervision and Administration, and Supplementary Provisions that cover major aspects of ADBC’s operation, management and prudential regulation. The main aspects include: 1) the Bank should comply with its strategic financial position, focus on policy-based operations and target at maintaining China’s food security, poverty alleviation, rural vitalization strategy’s implementation, agricultural and rural areas modernization, as well as rural infrastructure improvement; 2) the Bank should formulate a sound corporate governance mechanism featuring scientific decision-making, robust implementation and effective supervision, with its Board of Directors, senior management staff and Supervisory Board be subject to qualification requirements; 3) the Bank should form a comprehensive risk control and internal control system based on its operational characteristics to prevent and control risks, including credit risks and operational risks; 4) the Bank should build a sound capital mechanism, formulate effective plans for capital planning and capital supplement, and improve processes for internal capital adequacy assessment and the mechanism of dynamic capital supplement; 5) the Bank should build a sound incentive and restraint mechanism and improve its internal accountability.

 

The introduction of the Regulation will facilitate the implementation of the Bank’s reform plan, and help build a sustainable agricultural policy bank with clear positioning, highlighted functions, explicit business lines, adequate capital, standardized governance, secure operation and quality services. The Regulation will improve the banking regulatory system, strengthen regulatory areas of weakness and firmly uphold the rule-based regulation and supervision. While preventing and controlling risks, the Regulation will also provide guidance for the Bank to play a major role in the rural financial system.

atts:



Copyright: China Banking Regulatory Commission
ADDR:Jia N0.15 Financial Street, Xicheng District, Beijing, 100033