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	DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS ON MODIFYING THE "LAW OF THE PEOPLE'S REPUBLIC OF CHINA ON THE PEOPLE'S BANK OF CHINA"

	(Order of the President of the People's Republic of China (No. 12), December 27, 2003: The Decision of the Standing Committee of the National People's Congress on Modifying the "Law of the People's Republic of China on the People's Bank of China", which was adopted at the sixth session of the Standing Committee of the Tenth National People's Congress of the People's Republic of China on December 27, 2003, is now promulgated, and shall be implemented as of February 1, 2004)


SUBJECT : THE PEOPLE'S BANK OF CHINA
ISSUING DEPARTMENT : THE STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS OF THE PEOPLE'S REPUBLIC OF CHINA
ISSUE DATE : 12/27/2003
IMPLEMENT DATE : 02/01/2004
LENGTH : 1,828 words
TEXT :

It is decided at the sixth session of the Standing Committee of the Tenth National People's Congress to make the following modifications on the Law of the People's Republic of China on the People's Bank of China:

I. Article 1 shall be modified as "This Law is hereby formulated for the purpose of establishing the status of the People's Bank of China (PBC), clarifying its functions, ensuring the correct enactment and implementation of the state monetary policies, and establishing and perfecting a macro-control system through the central bank, as well as maintaining the stability of the banking industry".

II. Paragraph 2 of Article 2 shall be modified as "The People's Bank of China shall, under the guidance of the State Council, formulate and implement monetary policies, prevent and dissolve financial risks, and maintain the stability of the banking industry in the country".

III. Paragraph 1 of Article 4 shall be modified as "The People's Bank of China shall perform the following functions:

(1) Promulgating and implementing orders and regulations in relation to its functions;

(2) Formulating and implementing monetary policies in accordance with the law;

(3) Issuing Renminbi (RMB) and control its circulation;

(4) Supervising the inter-bank borrowing or lending markets and inter-bank bonds markets;

(5) Administering foreign exchange, and supervising inter-bank foreign exchange market;

(6) Supervising gold market;

(7) Holding, controlling and managing the state foreign exchange reserve and gold reserve;

(8) Managing the state treasury;

(9) Maintaining the normal operation of the systems for payments and settlements of accounts;

(10) Directing and disposing the anti-money-laundering work of the financial industry, being responsible for capital supervision and measurement over anti-money-laundering;

(11) Being responsible for the statistics, investigation, analysis, and forecasting of the financial industry;

(12) Undertaking the relevant international banking operations as the central bank of the state; and

(13) Other functions assigned to it by the State Council."

IV. Article 6 shall be modified as "The People's Bank of China shall submit a report on monetary policies and operation of the financial industry to the Standing Committee of the National People's Congress".

V. One Article shall be added as Article 9, that is, "The State Council shall establish a financial supervision and administration coordination mechanism, and shall formulate the specific measures for it".

VI. Article 11 shall be changed into Article 12, and one paragraph shall be added as paragraph 2, that is, "The monetary policy committee of the PBC shall play an important role in the state macro-control, and in the formulation and adjustment of monetary policies".

VII. Article 12 shall be changed into Article 13, which shall be modified as "The PBC shall, upon the need of performing its functions, establish branches as its representative organs, and exercise centralized and unified leadership and control over these branches.

The branches of the PBC shall, upon the authorization of the PBC, be responsible for maintaining the stability of financial industry and handling the relevant business operations in the areas under their respective jurisdictions".

VIII. Article 14 shall be changed into Article 15, and shall be modified as "The governor, deputy governors and other staff of the PBC shall keep state secrets according to law and have the duty to keep secrets of the banking institutions and the clients in relation to their performance of functions".

IX. Article 22 shall be changed into Article 23, of which item (1) of paragraph 1 shall be modified as "demanding that the banking institutions deposit the reserve fund at a required ratio"; and item (3) thereof shall be modified as "handling rediscounting for the banking institutions, which have opened accounts in the PBC"; and item (5) thereof shall be modified as "dealing in treasury bonds, other government bonds, financial bonds and foreign exchange on the open market".

X. Article 25 shall be changed into Article 26, which is modified as "The PBC may open accounts for banking institutions as needed, but may not overdraw the accounts of the banking institutions".

XI. Article 26 shall be changed into Article 27, which is modified as "The PBC shall organize or assist in organizing banking institutions in settling inter-institutional accounts, coordinate the activities and provide services thereof. The PBC shall set down specific procedures for such operation.

The PBC shall formulate rules for settlement of payment together with the banking regulatory organ of the State Council".

XII. Article 30 shall be changed into Article 31, which is modified as "The PBC shall make supervision and inspection over the operation of financial market, and implement macro-control on financial market, so as to promote its harmonious development".

XIII. Article 31 shall be cancelled.

XIV. Article 32 shall be modified as "The PBC shall have the right to make inspection and supervision over the following acts of the financial institutions, other entities or individuals:

(1) Acts of implementing the relevant provisions on the management of reserve against deposit;

(2) Acts in relation to the special loans of the PBC;

(3) Acts of implementing the provisions on Renminbi control;

(4) Acts of implementing the relevant provisions on the management of the inter-bank borrowing or lending markets and the inter-bank bonds markets;

(5) Acts of implementing the relevant provisions on foreign exchange control;

(6) Acts of implementing the relevant provisions on gold management;

(7) Acts on behalf of the PBC of managing the state treasury;

(8) Acts of implementing the relevant provisions on settlement management; and

(9) Acts of implementing the relevant provisions on anti-money-laundering.

The special loans mentioned in the preceding paragraph, refer to the loans used for special purpose, which are determined by the State Council and issued to financial institutions by the PBC".

XV. One Article shall be added as Article 33, that is, "The PBC may, for implementing the monetary policy and maintaining the stability of the finance, suggest that the banking regulatory organ of the State Council make inspection and supervision over banking institutions. And the banking regulatory organ of the State Council shall give a reply within 30 days upon receiving the suggestion".

XVI. One Article shall be added as Article 34, that is, "Where a banking institution has difficulty in payment, which may give rise to financial risks, the PBC may, upon the approval of the State Council, have the right to make inspection and supervision over the banking institution to maintain financial stability".

XVII. Article 33 shall be changed into Article 35, which is modified as "The PBC may, for performing its functions, have the right to require the banking institutions to submit the necessary balance sheet, statements of profits and other financial and statistical reports and materials.

The PBC shall, together with the banking regulatory organ of the State Council, and other financial supervision and administration organs of the State Council, establish the supervision and administration information sharing mechanism".

XVIII. Article 35 shall be cancelled.

IXX. Article 39 shall be changed into Article 40, which is modified as "The PBC shall manage its revenues and expenditures and accounting affairs in accordance with laws, administrative regulations, and the uniform financial and accounting systems of the state, and shall be subject to the respective auditing and supervision of the audit organs and the financial departments of the State Council in accordance with the law".

XX. Article 41 shall be changed into Article 42, which is modified as "Anyone who illegally prints or mints Renminbi, sells counterfeit or illegally printed or minted Renminbi, or knowingly transports counterfeit money or illegally printed or minted money, which constitutes a crime, shall be prosecuted for criminal liabilities according to law. If the circumstances are not serious enough to constitute a crime, he shall be punished by the public security organs with a detention of no more than 15 days and a fine of no more than RMB 10,000 Yuan".

XXI. Article 42 shall be changed into Article 43, which is modified as "Anyone who buys counterfeit or altered Renminbi or knowingly holds or uses counterfeit or altered or illegally printed or minted Renminbi, which constitutes a crime, shall be prosecuted for criminal liabilities. If the circumstances are not serious enough to constitute a crime, he shall be punished by the public security organs with a detention of no more than 15 days and a fine of no more than RMB 10,000 Yuan".

XXII. Article 45 shall be changed into Article 46, which is modified as "If any act listed in Article 32 of this Law is in violation of the relevant provisions, penalties shall be imposed according to the provisions on punishment in the relevant laws and administrative regulations if any. If there isn't any provision on punishment, the PBC shall, in accordance with the different circumstances, give warnings, confiscate illegal gains if any, and impose a fine of one time up to five times of the illegal gains in case the illegal gains are more than RMB 500,000 Yuan; and impose a fine of RMB 500,000 Yuan up to RMB 2 million Yuan, if there are no illegal gains or the illegal gains are less than RMB 500,000 Yuan. The directors and senior management personnel directly responsible and other persons directly liable shall be given a warning, or imposed upon a fine of RMB 50,000 Yuan up to RMB 500,000 Yuan. In case a crime is constituted, the criminal liability shall be prosecuted for according to law".

XXIII. Article 49 shall be changed into Article 50, which is modified as "If any functionary of the PBC divulges any state or commercial secret he acquires, which is serious enough to constitute a crime, he shall be prosecuted for criminal liabilities according to law. If the circumstances are not serious enough to constitute a crime, he shall be subject to administrative punishments according to law".

XXIV. Article 50 shall be changed into Article 51, which is modified as "If any functionary of the PBC commits embezzlement, bribery, malpractices for personal gains, abuse of powers, or neglect of duties, which constitutes a crime, he shall be prosecuted for criminal liabilities according to law. If the circumstances are not serious enough to constitute a crime, he shall be subject to administrative punishments according to law".

XXV. One Article shall be added as Article 52, that is, "The banking institutions mentioned in this Law, refer to the commercial banks, urban credit cooperatives, rural credit cooperatives, and other financial institutions and policy banks absorbing public deposits.

The provisions of this Law on banking institutions shall be applicable to the financial capital management companies, trust and investment companies, finance companies, and financial leasing companies, which are established within the territory of China, and other financial institutions established upon the approval of the banking regulatory organ of the State Council".

This Decision shall be implemented as of February 1, 2004.

The Law of the People's Republic of China on the People's Bank of China shall be modified in accordance with this Decision, and the order of the clauses thereof shall also be adjusted accordingly, and this modified Law shall be announced again.