The China Banking Regulatory Commission (CBRC) has released a new version of the “Rules for the Implementation of the Administrative Regulations of the People's Republic of China on Foreign-invested Banks” (“Implementing Rules”), which will take effect on 1 September 2015.

The new Implementing Rules will complement newly revised versions of the Regulations of the People’s Republic of China on the Administration of Foreign-invested Banks and the CBRC’s Rules for the Implementation the Foreign-invested Bank Licensing System. (“Licensing Rules”).

The revision of the Implementing Rules had three goals:

  • to update the law based on corresponding revisions to the regulations listed above
  • to reduce redundancies and inconsistencies between the Implementing Rules and the Licensing Rules
  • to revise the wording of certain provisions so as to improve the overall precision of the Implementing Rules.

Key changes to the implementing rules:

1. Incorporation and registration

The Implementing Rules abolish the requirement for foreign-invested banks to set up a representative office before incorporation. The new rules have also abolished minimum operating capital requirements.

Some matters which required approval in the past now need only be reported, such as extending a bank’s setup period, business opening, temporary closings, and resumption of business.

Provisions on licensing, such as procedures for obtaining licenses and required documents for applications, have been deleted or moved to the Licensing Rules. The transfer of provisions related to licensing has been carried out throughout all sections of the new Implementing Rules.

2. Business scope

The application requirements for a foreign-invested bank to use RMB have been loosened. For example, the term of operations is now limited to a minimum of one year, as opposed to the previous minimum of three years. A bank is no longer required to submit profit records for its two previous years. Now, once one branch has been approved to conduct business with RMB, new branches can begin preparations to use RMB during their setup periods. After a branch has been examined and approved by the regional CBRC branch, the bank branch can apply to conduct business with RMB immediately after they open.

3. Employee qualifications

The new provisions further unify requirements for candidates for the positions of Director, Senior Manager and Chief Representative in foreign-invested banks. Different personnel will be approved by various levels of CBRC offices.

The scope of the system for reporting the departure for personnel has been expanded, and a system for their replacement has been established.

4. Supervision

Actions which previously required approval, such as the use of interest-generating assets by a branch of a foreign-funded bank, and the transfer of any credit asset from the headquarters or from any associated bank, now only need to be reported to the CBRC’s local agent.

Also, the Implementing Rules decrease the number of bylaw amendments that require approval. If bylaw amendment(s) only involve the name, domicile, equity, registered capital, or business scope of the wholly foreign-funded bank or Chinese-foreign equity joint venture bank, and the modification has been approved by the CBRC, the bank need not submit an application to amend its bylaws. Rather, the bank need simply submit the amended bylaws to the CBRC and the bank’s local CBRC office within six months of CRBC approval of the bylaw change.

5. Termination and liquidation

In line with the PRC’s bankruptcy laws, a new article has been added to the Implementing Rules, stating that a wholly foreign-funded bank or Chinese-foreign equity joint venture bank may file for bankruptcy if it fails to pay its debts.

Provisions related to dissolution, closing a branch or representative office, replacing a branch with a representative office, and resuming business, have been moved from the Implementing Rules to the Licensing Rules.


Overall, the amendments to the Implementing Rules have been redesigned with a view to helping foreign-invested banks in China operate more practically. While the Implementing Rules strengthen effective supervision, they loosen requirements for entry into the market and for using RMB. This will provide a more open environment for the establishment and operation of foreign-invested banks