Chapter I General Provisions

Article 1 This law is enacted for the purposes of improving banking regulation and supervision, standardizing banking supervisory process and procedures, preventing and mitigating financial risks in the banking industry, protecting the interests of depositors and other customers, as well as promoting a safe and sound banking industry in China.

Article 2 The banking regulatory authority under the State Council shall be responsible for the regulation and supervision of the banking institutions in China and their business operations.

For the purposes of this law, the term “banking institutions” means financial institutions established in the People’s Republic of China that take deposits from the general public, including, among others, commercial banks, urban credit cooperatives and rural credit cooperatives, and policy banks.

The provisions of this law pertaining to the regulation and supervision of banking institutions are applicable to the regulation and supervision of asset management companies, trust and investment companies, finance companies, financial leasing companies and other financial institutions established in the People’s Republic of China as authorized by the banking regulatory authority under the State Council.

The banking regulatory authority under the State Council shall, in accordance with the applicable provisions of this law, regulate and supervise the financial institutions that, subject to its approval, are established outside the People’s Republic of China, as well as the overseas business operations conducted by the financial institutions referred to in the preceding two paragraphs.

Article 3 The objectives of banking regulation and supervision are to promote the safety and soundness of the banking industry and maintain public confidence in the banking industry.

Towards these objectives, the banking regulation and supervision shall protect fair competition in the banking industry and promote the competitiveness of the banking industry.

Article 4 The banking regulatory authority shall exercise banking regulation and supervision in accordance with laws and regulations and in line with the principles of openness, fairness and efficiency.

Article 5 The banking regulatory authority and its supervisory staff shall be protected by law while performing supervisory responsibilities in accordance with laws and regulations. There shall be no interference by local governments, government departments at various levels, public organizations or individuals.

Article 6 The banking regulatory authority under the State Council shall establish supervisory information sharing mechanisms with the People’s Bank of China and other financial regulatory authorities under the State Council.

Article 7 The banking regulatory authority under the State Council may establish supervisory cooperation mechanisms with the banking supervisory authorities in other countries and regions for the cross-border banking supervision.

Chapter II The Banking Regulatory Authority

Article 8 The banking regulatory authority under the State Council may, if deemed necessary for performing its responsibilities, set up local offices, and shall exercise centralized oversight of its local offices.

The local offices of the banking regulatory authority under the State Council shall perform supervisory functions as authorized by the banking regulatory authority under the State Council.

Article 9 The supervisory staff of the banking regulatory authority shall have the professional skills and work experiences as required for performing their duties.

Article 10 The staff of the banking regulatory authority shall perform their duties incorruptible with integrity and in accordance with laws and regulations. They shall not take advantage of their positions to seek inappropriate gains, or concurrently hold a position in enterprises including financial institutions.

Article 11 The staff of the banking regulatory authority shall preserve the confidentiality of information for the state according to applicable laws and regulations, and for the banking institutions subject to their supervision and other parties concerned.

The banking regulatory authority under the State Council shall make relevant arrangements for preserving the confidentiality of information while exchanging supervisory information with the banking supervisory authorities in other countries and regions.