On December 10 2017 the State Council announced a pilot programme as part of its Decision on Temporarily Adjusting the Administrative Approval Items and Special Administrative Measures on Access Prescribed in the Relevant Administrative Regulations or State Council's Circulars in Beijing (Guo Fa [2017] 55).

According to the decision, the State Council has, among other things, lifted the requirements on foreign-invested banks entering the renminbi yuan (Rmb) business market in Beijing by amending Article 34 of the Administrative Regulations of the People's Republic of China on Foreign-Invested Banks from the date of the announcement until May 5 2018. As a result, foreign-invested banks are no longer required to have operated for more than one year before applying to conduct Rmb business in Beijing.

Article 34 has been amended as follows:

Previous Article 34

Amended Article 34

"In case the business institution of a foreign-invested bank is to conduct any RMB business within the scope set out in Article 29 or Article 31 of the Regulations, it shall meet the following conditions, and shall obtain the approval of the banking regulatory authority of the State Council:

  1. Having started business within the territory of China for more than one year."

"Study and allow a newly established or restructured wholly foreign-owned bank, a Sino-foreign joint venture bank, or a branch of a foreign bank to apply for RMB business at the same time when submitting [an] application for opening business."

According to the decision, the relevant departments of the State Council and the Beijing Municipal People's Government must, in accordance with the amendment:

  • make corresponding amendments to their regulations and standard documents; and
  • establish an administrative system in line with the pilot programme.

The State Council will adjust the relevant instruments in accordance with the decision's implementation when the pilot programme ends.

The decision has relaxed the market entry requirements applicable to foreign-invested banks in Beijing with respect to Rmb business and is another step towards encouraging foreign investment in the financial sector.

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For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email (jjwu@jingtian.com). The Jingtian & Gongcheng website can be accessed at www.jingtian.com.