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Systematic, Foresighted and Scientific Approach Needs to be Adopted to Further Enhance China’s Banking Legislation through the Opportunities of the Comprehensive Amendments (No.294, 2020)
2021-01-25
By Wang Gang, Research Institute of Finance, DRC
Research Report, No.294, 2020 (Total 6038) 2020-12-10
Abstract: The recent announcement by the People’s Bank of China soliciting public opinions and suggestions on the new draft Law of the People’s Republic of China on Commercial Banks marks another major revision to the basic law of China’s banking sector after 17 years since the last revision. In light of the content, this revision mainly involves aspects including expanding the scope of legislative adjustments, improving business operation rules and regulations, strengthening the corporate governance of banking sectors, implementing capital and risk management, regulating protections of bank clients’ rights and interests, underlining the supervision and inspection responsibility of the Central Bank and deposit insurance administrative agencies and intensifying the punishment on violations of the law. In regard to the impact, this revision will be conducive to pushing ahead with the refinement of the banking sector’s layout and structure with better function division among big-, medium- and small-sized banks, and further enhancement of financial products and services, preventing financial risks and promoting the high-quality development of the banking sector. Based on the intention of an improved law of the banking sector to ensure its role to better serve the development of the real economy, this report has proposed some specific policy options focusing on enhancing the legislation of the banking sector in a systematic, foresighted and scientific manner.
Keywords: Law of the People’s Republic of China on Commercial Banks, the content of revision, impact on industry, policy options for improvement
