Measures for the Administration of Interbank Borrowing
Chapter I General Rules Article 1 In order to further develop the currency market, regulate interbank borrowing trading, prevent interbank borrowing risks and maintain the legitimate rights and interests of all the parties involved in the interbank borrowing, these Measures are formulated in accordance with the Law of the People's Republic of China on the People's Bank of China, the Law of the People's Republic of China on Commercial Banks and other laws and administrative regulations. Article 2 These Measures shall apply to RMB interbank borrowing trading between those financial institutions as legally established within the territory of the People's Republic of China. Article 3 Interbank borrowing as referred to in these Measures means the unsecured financing as conducted between those financial institutions that have entered the national interbank borrowing market (hereinafter referred to as interbank borrowing market) upon the approval of the People's Bank of China (PBC) via
national unified interbank borrowing networks. The national unified interbank borrowing networks include: (1) Electronic Trading System of the National
Interbank Funding Center; (2) borrowing filing systems of PBC branches; and (3) other trading systems as authorized by the PBC. Article 4 The PBC will supervise and administrate the interbank borrowing market in accordance with relevant laws. Any financial institutions may enter into the interbank borrowing market upon the approval of the PBC, and engage in the interbank borrowing trading under the supervision and inspection of the PBC. Article 5 The principle of fairness, free will, truthfulness, self discipline and being at one's own risks shall be observed in the interbank borrowing trading.
Chapter II Market Access Management Article 6 The financial institutions as follows may make an application to the PBC for entering the interbank borrowing market: (1) policy banks;
(2) Chinese-invested commercial banks; (3) solely foreign-funded banks and Chinese-foreign joint-venture banks; (4) urban credit cooperatives; (5) rural credit cooperative unions at county level; (6) corporate finance companies; (7) trust companies; (8) financial assets management companies; (9) financial leasing companies; (10) auto financing companies; (11) securities companies; (12) insurance companies; (13) insurance assets management companies; (14) first-class branches as authorized by
Chinese-invested commercial banks (excluding urban commercial banks, rural commercial banks and rural cooperative banks); (15) branches of foreign banks; and (16) other institutions as affirmed by the PBC. Article 7 The following requirements shall be satisfied by a financial institution that applies for entering the interbank borrowing market:
(1) It shall be lawfully established within the territory of the People's Republic of China; (2) It has a sound and perfect interbank borrowing organizational structure, risk management system and internal control system; (3) It has a special staff that conducts interbank borrowing trading; (4) The main supervisory indicators thereof shall conform to the provisions as prescribed by the PBC and other competent regulatory authorities; (5) It has no record of punishment as imposed by the PBC or any competent regulatory authority because of any illegal or irregular act for the past two years; (6) It has no circumstance as insolvency in the past two years; and (7) Other requirements as prescribed by the PBC. Article 8 In addition to the requirements as
prescribed in Article 7 of these Measures, the applicants for entering the interbank borrowing market shall also meet the following requirements: (1) A solely foreign-funded bank, Chinese-foreign joint-venture bank or branch of a foreign bank shall
obtain the qualification for RMB business upon approval of the banking regulatory authority under the State Council; (2) A corporate finance company, trust company, financial assets management company, financial leasing company, auto financing company or insurance assets management company shall have gained profits for two last successive years prior to making an application for entering the interbank borrowing market; (3) A securities company shall have gained profits for two last successive years prior to making an
application for entering the interbank borrowing market,, and its net capital shall be no lower than RMB 200 million yuan in the same term; and (4) An insurance company shall have the adequacy ratio of its repayment capacity at or above 120 percent successively for the recent four quarters prior to making an application for entering the interbank borrowing market. Article 9 A financial institution that applies for entering the interbank borrowing market shall file application materials to the PBC or its branch in light
of the procedures as prescribed by the PBC. Article 10 The term for the PBC or its branches to assess the applications of financial institutions for entering the interbank borrowing market shall be subject to the provisions as prescribed in Articles 28 and 29 of the Measures of the People's Bank of China for the Implementation of Administrative Licensing. Article 11 Where any financial institution that has already entered the interbank borrowing market
determines to withdraw from the interbank borrowing market, it shall report to the PBC or its branch no less than 30 days in advance, and specify the reasons for withdrawal from the interbank borrowing market at the same time, and shall submit a plan for liquidation and disposal of creditor's rights and debts as well. Where a financial institution determines to withdraw from the interbank borrowing market, it shall take effective measures to ensure the smooth liquidation of creditor's rights and debts, and constitute an advance plan for effective risk disposal against any possible problem. Article 12 The PBC or its branch shall publicize in
the interbank borrowing market in a proper manner when it approved the entering of a financial institution into the interbank borrowing market or received a report of a financial institution on its withdrawal from the interbank borrowing market. No institution may illegally release any relevant information to the market before the PBC or its branch publicizes an official bulletin. Article 13 The PBC or its branch shall not accept any application from the financial institution for
entering the interbank borrowing market within two years as of the bulletin on its withdrawal from the interbank borrowing market.
Chapter III Trading and Settlement Article 14 The interbank borrowing trading must be performed inside borrowing network. A policy bank, corporate finance company, trust company, financial assets management company, the national unified interbank
financial leasing company, auto financing company, securities company, insurance company or insurance
assets management company shall conduct the interbank borrowing in the name of a legal person through the Electronic Trading System of the National Interbank Funding Center. Those financial institutions that conduct interbank borrowing trading through the interbank borrowing filing systems of PBC branches shall go through relevant formalities in accordance with the provisions as prescribed by the local PBC branches. Article 15 The interbank borrowing trading shall be performed by means of inquiries, upon independent negotiations, and transaction by transaction. Article 16 The interbank offered rate shall be negotiated and determined by both trading parties. Article 17 Where financial institutions conduct interbank borrowing trading, they shall conclude transaction contracts one by one. A transaction contract shall be detailed and specific, and the rights and obligations of both parties in the interbank borrowing shall be stipulated in detail. A contract shall include the items as follows: (1) Names, domiciles of both parties in the interbank
borrowing and names of legal representatives thereof; (2) The transaction date of interbank borrowing; (3) The transaction amount of interbank borrowing; (4) The term of the interbank borrowing trading; (5) The interbank offered rate, rules for calculation of such rate and rules for payment of interests; (6) Liabilities for breach of contract; and (7) Other items as required to be specified by the PBC. Article 18 A transaction contract may be the
transaction sheet as formed by the Electronic Trading System of the National Interbank Funding Center, or other written form as the contract, letter, and data message, etc.. Article 19 In case different banks are involved in the capital settlement for interbank borrowing, it shall be handled directly by the financial institutions themselves or by authorizing their account opening banks through the PBC Large-amount Real-time Payment System. Any capital settlement for interbank borrowing that can be implemented inside a same bank shall be conducted by way of capital transfer. No capital settlement for interbank borrowing may be performed by
cash.
Chapter IV Risk Control Article 20 The interbank borrowing risk management shall be integrated into overall risk management framework by a financial institution, and the systems for interbank borrowing risk management shall be established and perfected in light of the features of inter-bank borrowing, a specialized interbank
borrowing risk management body shall be established, as well as the internal operating rules and control measures for interbank borrowing risk management. Article 21 A financial institution shall
appropriately keep all the transaction records on the interbank borrowing, and all the relevant documents, accounts, original vouchers, statements, telephone recording and other materials to the said transaction records as well. Article 22 The use of the capital borrowed from interbank borrowing by a financial institution shall comply with relevant provisions in the Law of the People's Republic of China on Commercial Banks.
Article 23 The interbank borrowing term shall be determined upon negotiations of both trading parties on the premise that the following provisions are observed: (1) The term of interbank borrowing for a policy bank, Chinese-invested commercial bank, a first-class branch of a Chinese-invested commercial bank, a
Chinese-foreign joint-venture bank, a branch of a foreign bank, urban credit cooperative, or a
county-level rural credit cooperative union shall not be more than one year; (2) The term of interbank borrowing for a financial assets management company, financial leasing company, auto financing company, or insurance company shall not be more than three months; (3) The term of interbank borrowing for a corporate finance company, trust company, securities company or insurance assets management company shall not excess seven days; and (4) The term of interbank borrowing for a financial institution shall not be in excess of the term of interbank borrowing for the other party as prescribed
by the PBC. The PBC may alter the term of interbank borrowing for financial institutions according to market development and management requirements. Article 24 No interbank borrowing may be extended upon expiration. Article 25 The quota management will be performed for the interbank borrowing of financial institutions, and the interbank borrowing quota shall be verified by the PBC and its branches in accordance with the principles as follows: (1) The maximum amount of interbank borrowing or interbank lending for a policy bank shall not be more than 8 percent of the balance of its financial bonds to be repaid at the end of the last year; (2) The maximum amount of interbank borrowing or interbank lending for a Chinese-invested commercial bank, urban credit cooperative or a rural credit cooperative union at county level shall not be more than 8 percent of the balance of all kinds of deposits in it; (3) The maximum amount of interbank borrowing or
interbank lending for a solely foreign-funded bank or Chinese-foreign joint-venture bank shall be no more than two times of its paid-in capital; (4) The maximum amount of interbank borrowing or interbank lending for the branch of a foreign bank shall not exceed two times of its RMB operating amount; (5) The maximum amount of interbank borrowing or interbank lending for a corporate finance company, financial assets management company, financial leasing company, auto financial company or insurance company shall be no more than 100 percent of its paid-in capital; (6) The maximum amounts of interbank borrowing or interbank lending for a trust company or insurance assets management company shall not exceed 20 percent of its net assets; (7) The maximum amount of interbank borrowing or interbank lending for a securities company shall be no more than 80 percent of its net assets; and (8) The maximum amount of interbank borrowing or interbank lending for a first-class branch as
authorized by a Chinese-invested commercial bank
(excluding urban commercial banks, rural commercial banks and rural cooperative banks) shall be decided upon authorization of the headquarters thereof, and shall be included into the corresponding amount of its headquarters for unified assessment. The PBC may alter the interbank borrowing quotas of financial institutions according to market development and management requirements. Article 26 Where a financial institution applies for adjusting the interbank borrowing quota, it shall hand in application materials to the PBC or its branch according to the procedures for applying for entering the interbank borrowing market. Article 27 The PBC may temporarily adjust the interbank borrowing quota upon an application as submitted by a financial institution. A PBC branch may temporarily alter interbank borrowing quotas of financial institutions within its
jurisdiction within the scope as authorized by the PBC.
Chapter V Information Disclosure Management Article 28 Where a financial institution has entered
the interbank borrowing market, it shall bear the obligation for information disclosure to the interbank borrowing market. The director or legal representative of that financial institution shall guarantee the genuineness, accuracy, integrity and timeliness of the disclosed information. Article 29 The PBC shall be responsible for
formulating the bylaws for information disclosure by various kinds of financial institutions in the surveilling the
interbank borrowing market, and implementation of such bylaws.
Article 30 The National Interbank Funding Center is a service intermediary for the interbank borrowing market, which provides services for the transactions of financial institutions and information disclosure in the interbank borrowing market. The National Interbank Funding Center shall enact the operational bylaws for transactions and information disclosure in the interbank borrowing market in accordance with these Measures, and implement such bylaws upon the approval of the PBC. Article 31 The National Interbank Funding Center shall
publicize to the market such market information and statistical data as the interest rate, transaction volume, significant abnormal transactions, etc. in a timely manner. Article 32 The National Interbank Funding Center shall take the responsibilities of routine monitoring and market statistics of the interbank borrowing market, submitting statistical data concerning the interbank borrowing market to the PBC at regular intervals, providing the statistical information about filing systems to the PBC branches at the provincial level, and timely reporting any abnormal in the interbank borrowing market to the PBC, and informing it to the relevant PBC branch at the provincial level. Article 33 Where a financial institution fails to reveal information to the interbank borrowing market as prescribed by the PBC, or discloses any information including any false recording, misleading statement or major omission, the PBC is entitled to take such restraint measures as ordering it to supplement the disclosure of information within a time limit, reducing its interbank borrowing quota upon verification,
shortening its longest interbank borrowing term, restricting its scope of interbank borrowing,
suspending or stopping its networking with the National Interbank Funding Center, etc..
Chapter VI Supervision and Administration Article 34 The PBC will conduct both non-spot supervision and spot inspection on the interbank borrowing according to law, and give guidance and supervision on the guild self-discipline organizations in the interbank borrowing market. Article 35 The PBC branches at the provincial level shall take the responsibility of working out the measures for implementing the interbank borrowing filing administration for its own jurisdiction, and supervising interbank borrowing trading through the borrowing filing system by the financial institutions within its jurisdiction. Article 36 In light of the necessary performance of the supervisory duties for the interbank borrowing market, the PBC or its branches at the provincial level may take the following measures for the spot interbank
borrowing inspection: (1) inspection inside the financial institutions; (2) inquiries of the staff of financing institutions about making explanations on the relevant inspection matters; (3) consulting and photocopying the documents and materials of financial institutions relating to the inspection matters, and sealing up those documents and materials that may be transferred, destroyed, hidden or modified; and (4) inspections on the systems of financial
institutions for the management of business data by using computers. Article 37 In case a PBC sub-branch of a prefecture or city finds there is any abnormal interbank borrowing trading and regards it necessary to conduct a spot interbank borrowing inspection, it shall report it to the competent PBC branch at the provincial level and perform such an inspection upon approval. Article 38 When implementing spot interbank borrowing inspections, the PBC, its sub-branches of prefectures or cities or its branches at a higher level shall
observe the
relevant
provisions of
the PBC on
supervision and inspection procedures. Article 39 In light of the necessary performance of the supervisory duties over the interbank borrowing market, the PBC, its sub-branches of prefectures or cities or its branches at a higher level may have conversations with directors and senior managers of financial institutions, and require them to make explanations on major matters relating to implementing the provisions on the administration of the interbank borrowing market. Article 40 The PBC, its sub-branches of prefectures or cities or its branches at a higher level shall perform spot interbank borrowing inspections on
financial institutions and report the inspection circumstances to the relevant regulatory authority if necessary.
Chapter VII Legal Liabilities Article 41 In the case of any of the following acts committed by a financial institution, the PBC, it sub-branch of a prefecture or city or its branch at a
higher level shall impose it relevant punishments: (1) It conducts the interbank borrowing business without relevant qualifications; (2) It performs the interbank borrowing with any institution without qualification for interbank
borrowing business; (3) It engages in the interbank borrowing business outside the national unified interbank borrowing network; (4) It uses the borrowed capital for any purpose in violation of relevant laws or regulations; (5) It performs the interbank borrowing business by excess of the longest borrowing term as prescribed by the PBC; (6) It has the balance of interbank borrowing more than the quota as verified by the PBC; (7) It fails to disclose the information to the interbank borrowing market in accordance with the provisions as prescribed by the PBC; or (8) Any other act in violation of the provisions on the interbank borrowing market. Article 42 With respect to any commercial bank under
any of the circumstances as prescribed in Article 41 of these Measures, the PBC, it sub-branch of a prefecture or city or its branch at a higher level shall punish it in accordance with relevant provisions in Article 76 of the Law of the People's Republic of China on Commercial Banks. Article 43 With respect to any policy bank, credit cooperative, corporate financial company, trust
company or financial leasing company under any of the circumstances as prescribed in Article 41 of these Measures, the PBC, its sub-branch of a prefecture or city or its branch at a higher level shall impose a punishment upon it in accordance with relevant
provisions in Article 17 of the Measures for the Punishment of Illegal Financial Acts. Article 44 With respect to any securities company, insurance company, insurance assets management company, financial assets management company or auto financial company under any of the circumstances as prescribed in Article 41 of these Measures, the PBC, its sub-branch of a prefecture or city or its branch at a higher level shall punish it in accordance with relevant provisions
in Article 46 of the Law of the People's Republic of China on the People's Bank of China. Article 45 With respect to any director, senior manager or other person of a financial institution that should have direct responsibility of an act referred to in Article 41 of these Measures, he/she shall be punished as prescribed in Article 46 of the Law of the People's Republic of China on the People's Bank of China. Article 46 In the case of any of the following acts committed by the National Interbank Funding Center, the PBC shall punish it in accordance with relevant provisions in Article 46 of the Law of the People's Republic of China on the People's Bank of China: (1) It fails to publicize market information pursuant to legal provisions, issues false information or non-public information in a timely manner; (2) Any severe safety accident arises in its trading system or information system, which brings major impact to the market; (3) It causes serious losses to market participants or produces major impacts to the market due to its
failure to perform duties; (4) It offers convenience to any other financial institution for unlawful interbank borrowing trading; (5) It fails to submit statistical data in light of legal provisions or fails to report the abnormal condition of the interbank borrowing market; or (6) Any other act in violation of the provisions on the interbank borrowing market. Any senior manager or other person that should have direct responsibility of any act referred to in the preceding paragraph shall be punished in accordance with relevant provisions in Article 46 of the Law of the People's Republic of China on the People's Bank of China. Article 47 Where any certified public accountant, attorney, credit rating institution, or person any that other /which
professional
institution
provides professional
services to the
interbank
borrowing market by revealing the information issues any document including any false recording, misleading statement or major omission, he/it shall not provide any professional service to the interbank borrowing
market; and shall bear corresponding legal liabilities if he/it is in violation of any relevant legal provisions. Article 48 The PBC, its sub-branch of a prefecture or city or its branch at a higher level shall make an announcement to the relevant regulatory authorities after punishing a financial institution in violation of these Measures. If any financial institution is found in violation of these Measures, the PBC
sub-branch of a county or city shall report the violation to the branch at the next higher level, which shall impose relevant punishment on the said financial institution under these Measures. Article 49 When imposing administrative sanctions on financial institutions in violation of these Measures, the PBC, its sub-branch of a prefecture or city or its branch at a higher level shall follow the Provisions on the Procedures for Administrative Sanctions of the People's Bank of China. Article 50 The PBC and its branches shall be subject to the supervision for their surveillance on interbank borrowing market according to law, and bear the
relevant legal liabilities.
Chapter VIII Supplementary Rules Article 51 PBC branches at the provincial level referred to in these Measures means all the branches, business management departments, central sub-branches in provincial capitals and central sub-branches in deputy-provincial cities of the PBC. Article 52 The engagement in foreign exchange
interbank borrowing by financial institutions shall be formulated by the PBC respectively. Article 53 These Measures are subject to the
interpretation of the PBC, and shall be implemented upon arrangement of Shanghai Headquarters of the PBC. Article 54 These Measures shall enter into force as of August 6, 2007. The Trial Measures for the Administration of Interbank Borrowing as promulgated by the PBC on March 8, 1990 shall be annulled on the same date. In case any other provision on interbank borrowing conflicts with these Measures, the latter shall prevail.