Laws of the People's Republic of China

The Standing Committee of the National People's Congress

Order of the President of the People's Republic of China

No.47

Adopted by the Standing Committee of the Eighth National People's Congress in l995

President of the People's Republic of China: Jiang Zemin

May 10, 1995

Commercial Bank Law of the People's Republic of China

Chapter I General Provisions

Article 1

This Law is formulated to protect the legitimate rights and interests of commercial banks, depositors and other clients, standardize the behavior of commercial banks, improve the quality of funds, strengthen supervision and administration, ensure safety and soundness of commercial bank, maintain a normal financial order and promote the development of the socialist market economy.

Article 2

The commercial banks referred to in this Law are bodies corporate established in accordance with this Law and the Company Law of the People's Republic of China to receive money deposits from the public, extend loans, provide settlement services and do other relevant businesses.

Article 3

A commercial bank may engage in some or all of the following businesses:

(1)

receiving money deposits from the public;

(2)

extending short, medium and long-term loans;

(3)

providing domestic and international settlement services;

(4)

discounting bills;

(5)

issuing financial bonds;

(6)

acting as agent of issuing, cashing and underwriting government bonds;

(7)

dealing in government bonds;

(8)

inter-bank call-money business;

(9)

dealing or acting as agent in foreign exchange transactions;

(10)

providing L/c service and guarantee;

(11)

acting as agent in collection and payment and insurance business;

(12)

providing safe deposit box service;

(13)

other businesses approved by the People's Bank of China.

The business scope of a commercial bank is defined by the statute thereof and reported to the People's Bank of China for approval.

Article 4

A commercial bank operates independently, takes up responsibility for all risks it may encounter and for its own profits and losses it may bear, and exercises self-regulating mechanism on the management principle of economic efficiency, safety and liquidity.

A commercial bank shall conduct its business in accordance with the law, free from interference by any department or individual.

A commercial bank shall assume civil responsibilities independently with its entire assets as a body corporate.

Article 5

A commercial bank shall abide by the principle of equality, voluntariness, fairness, honesty and good faith in doing business with its clients.

Article 6

A commercial bank shall protect its depositors' legitimate rights and interests from encroachment by any organization or individual.

Article 7

In doing credit business, a commercial bank shall strictly examine the credibility of a borrower and persist in extending loans against collateral in order to ensure recalling loans on time.

A commercial bank is protected by law to retrieve the principal and interests of a loan from the borrower thereof in accordance with the law.

Article 8

A commercial hank shall abide by the relevant provisions of the law and administrative decrees and regulations in doing business and shall not impair the interests of the state or the public.

Article 9

A commercial bank shall abide by the principle of fair competition in doing its business and refrain from unfair competition.

Article 10

A commercial bank shall be subject to supervision and administration by the People's Bank of China in pursuance of the law.

Chapter II Establishment and Organization of A Commercial Bank

Article 11

The establishment of a commercial bank shall require the examination and approval by the People's Bank of China.

No organization or individual shall receive money deposits from the public or do any other businesses of a commercial bank or use the title of "bank" without the approval of the People's Bank of China.

Article 12

The establishment of a commercial bank shall satisfy the following requirements:

(1)

having its statute in pursuance of this Law and the Company Law of the People's Republic of China;

(2)

having the minimum registered capital defined by this Law;

(3)

having chairman of directors (president), general manager and other senior managerial personnel with expertise and professional experience required by their positions;

(4)

having complete organization and management;

(5)

having up-to-standard business site, safety measures and other facilities relevant with the business thereof.

The People's Bank of China in examining the application for the establishment of a commercial bank should take into account the need for economic growth and the competition of the banking industry.

Article 13

The minimum registered capital for the establishment of a commercial bank shall be RMB one billion yuan (RMB 1,000,000,000 yuan). Of the commercial banks, an urban cooperative commercial bank shall need a minimum registered capital of RMB 100 million yuan (RMB 100,000,000 yuan) and a rural cooperative commercial bank shall need a minimum registered capital of RMB 50 million yuan (RMB 50,000,000 yuan). Registered capital herein referred to should be paid-up capital.

The People's Bank of China may readjust the floor amount of the registered capital necessary for the establishment of a commercial bank in the light of economic development, but the amount shall not be lower than those specified in the previous paragraph.

Article 14

The applicant shall apply to the People's Bank of China for the establishment of a commercial bank by submitting the documents and information listed below:

(1)

an application for the establishment of a commercial bank, specifying the name, location, registered capital and business scope of the bank thereof;

(2)

a feasibility study report;

(3)

other documents and information required by the People's Bank of China.

Article 15

The application having been examined to be in compliance with the provisions of Article 14 of this Law, the applicant shall fill a formal application form and submit the documents and information listed below:

(1)

a draft of the statute of the commercial bank to be established;

(2)

qualification documents of the senior managerial staff to be employed;

(3)

a certificate of capital confirmation from a legitimate capital confirmation authority;

(4)

a list of the names, capital contributions and shares of the share holders of the commercial bank;

(5)

credit certificate and other relevant information of the share holders, each holding more than ten percent of the registered capital of the commercial bank;

(6)

the guideline and plan for the operation of the commercial bank;

(7)

information of the business site, safety measures and other facilities relevant with the business of the commercial bank;

(8)

other documents and information required by the People's Bank of China.

Article 16

Having been approved for establishment, the commercial bank shall be issued banking permit by the People's Bank of China and with it register with the Administration for Industry and Commerce for a business license.

Article 17

The Company Law of the People's Republic of China is applicable to the form and structure of the organization of a commercial bank.

A commercial bank which was established prior to the promulgation of this Law may follow the original provisions if its organizational form and structure do not entirely conform with the Company Law of the People's Republic of China, and the time limit for the retention thereof shall be decided by the State Council.

Article 18

A commercial bank solely owned by the state shall have a board of supervisors. The Board of Supervisors shall be composed of representatives of the People's Bank of China and governmental departments, experts from other relevant departments and representative of the staff of the bank. The way of establishing the Board of Supervisors shall be defined by the State Council.

The Board of Supervisors shall exercise control of the solely state-owned commercial banks over the quality of credit funds, the ratio of assets and liabilities, the hedging and appreciation of the state-owned assets and other relevant matters of the bank and the behavior of its high ranking managerial personnel violating the law, administrative decrees and regulations or statute or acts damaging the interests of the bank.

Article 19

A commercial bank may set up its branches within and outside the territory of the People's Republic of China in keeping with its business needs. A branch thereof shall be set up with the approval of the People's Bank of China. Branches of a commercial bank inside the People's Republic of China need not be set up in conformity with administrative divisions.

A commercial bank in setting up a branch within the territory of the People's Republic of China shall allocate to it a working capital in keeping with the business scope thereof as is stipulated. The total sum of the working capital to be allocated to all branches shall not exceed sixty percent of the total capital of the commercial bank proper.

Article 20

For the establishment of a branch, the applying commercial bank shall submit the documents and information listed below:

(1)

an application for establishing a commercial bank branch whereby should be specified the name, amount of working capital, business scope and the locations of the headquarters and branch of the commercial bank;

(2)

a financial report of the last two years of the applicant;

(3)

certificates of qualifications of the senior managerial officials to be appointed;

(4)

the business guideline and plan;

(5)

information related to the business site, safety measures and other facilities relevant with the business thereof;

(6)

other documents and information required by the People's Bank of China.

Article 21

Having been approved to be established, a commercial bank branch shall be granted a banking permit by the People's Bank of China, and with the permit shall register with the Administration for Industry and Commerce and obtain a business license.

Article 22

A commercial bank shall apply to its branches a financial system of unified accounting and centralized fund allocation and level-by-level management.

The branch of a commercial bank shall not be qualified as a body corporate and it shall do business within the scope authorized by the headquarters which shall assume the civil responsibilities thereof.

Article 23

Having been approved to be established, a commercial bank and its branches shall be announced to the public by the People's Bank of China.

When a commercial bank or its branch has not started operation for over six months from the date of being granted a business license without proper reason or has automatically suspended operation for over six consecutive months after starting its operation, the People's Bank of China shall revoke its banking permit and make a public announcement thereof.

Article 24

In the event of one of the changes listed below, a commercial bank shall need to obtain the approval from the People's Bank of China:

(1)

change of the name of the commercial bank;

(2)

change of the registered capital;

(3)

change of the business sites of the head office and/or its branch(es) of the bank;

(4)

readjustment in business scope;

(5)

change of share holders, each holding more than ten percent of the total capital or total shares of the commercial bank;

(6)

revision of the statute;

(7)

other changes specified by the People's Bank of China.

When a commercial bank needs to replace its chairman of the board of directors, or general manager with a new one, the qualifications of the appointee shall be reported to the People's Bank of China for examination.

Article 25

The Company Law of the People's Republic of China is applicable to the split and merger of commercial banks.

The split or merger of commercial banks shall require the examination and approval by the People's Bank of China.

Article 26

A commercial bank shall use the banking permit pursuant to law and administrative decrees and regulations. It is prohibited to counterfeit, tamper with, transfer, lease or lend the banking permit.

Article 27

Anyone who has one of the following backgrounds shall not be fit for high managerial positions in a commercial bank:

(1)

having once been sentenced to punishment for the crimes of embezzlement, bribery, illegal possession of property, misappropriation of public property or disruption of social economic order, or having been deprived of political rights for crimes;

(2)

having served as a director of the board of directors, the director or manager of a company which went bankrupt because of mismanagement and having been personally responsible for the bankruptcy;

(3)

having been the legal representative of a company whose business license had been revoked on account of violation of the law and having been personally responsible thereof;

(4)

having failed to repay a fairly large debt already due.

Article 28

Any organization or individual intending to buy more than ten percent of the shares of a commercial bank shall have to obtain the approval from the People's Bank of China.

Chapter III Protection of Depositors

Article 29

A commercial bank in its savings deposit business shall abide by the principle of voluntariness in depositing, freedom of withdrawal, interest on every deposit and keeping secret for the depositor.

With regard to savings deposits of individuals, a commercial bank has the right to reject the demand of any department or individual for investigation, freezing, withholding or transferring a savings deposit, unless it is otherwise defined by the law.

Article 30

With regard to deposits of any organization, a commercial bank has the right to reject the demand of any other organization or individual for investigation; unless it is otherwise defined by the law or administrative decrees and regulations; it has the right to reject the demand of any other organization or individual for freezing, withholding or transferring such a deposit, unless it is otherwise defined by the law.

Article 31

A commercial bank shall fix its interest rates for deposits pursuant to the ceiling and floor of interest rates defined by the People's Bank of China and make public announcement thereof.

Article 32

A commercial bank shall place a required reserve with the People's Bank of China and keep adequate standby reserve in accordance with the stipulations by the People's Bank of China.

Article 33

A commercial bank shall guarantee the payment of the principal and interests of every deposit and shall not delay or refuse the payment thereof.

Chapter IV Basic Principles for Loans and Other Businesses

Article 34

A commercial bank shall conduct its loan business in accordance with the need for the development of the national economy and social progress and under the guidance of the state industrial policy.

Article 35

A commercial bank shall conduct strict examination of the usage, capability and form of repayment as well as other relevant matters of a borrower in order to extend a loan.

A commercial bank shall implement a system in which the examination and the actual extending of a loan are conducted by separate departments and the examination and approval of a loan are conducted at different levels.

Article 36

A commercial bank shall extend a loan against a security, and conduct strict examination of the repaying capability, the ownership and value of the mortgage or pledge, and the feasibility of the realization of the mortgage or pledge.

A borrower may be exempted from securities after the commercial bank has conducted examination and found it to have a high credit rating and to have the capability of repayment.

Article 37

A commercial bank shall sign a written contract with its borrower on the extending of a loan. The contract shall specify the category, usage, amount, rate of interest, date and form of repayment, default liabilities and other matters deemed as necessary by the two parties.

Article 38

A commercial bank shall fix its interest rates for loans in accordance with the ceiling and floor for the rates of interest for loans fixed by the People's Bank of China.

Article 39

A commercial bank in its loan business shall abide by the regulations on the ratios of assets and liabilities listed below:

(1)

the capital adequacy rate shall not fall short of eight percent;

(2)

the ratio of the outstanding balance of loans to that of deposits shall not exceed seventy-five percent;

(3)

the ratio of the outstanding balance of liquid assets to that of liquid liabilities shall not fall short of twenty-five percent;

(4)

the ratio of the outstanding balance of loans to one borrower to that of the capital of the bank shall not exceed ten percent;

(5)

other stipulations by the People's Bank of China on asset and liability management.

When a commercial bank which was established prior to the promulgation of this Law is found to have its ratios of assets and liability at variance with the stipulations hereinbefore, it is required to conform to the stipulations within a designated time limit. Concrete rules for the implementation shall be defined by the State Council.

Article 40

A commercial bank shall not extend unsecured loans to related persons; and shall not provide related persons with secured loans on conditions more favorable than those to a borrower of a similar loan.

The related persons mentioned in the previous paragraph refer to:

(1)

the members of the board of directors, members of the board of supervisors, managerial personnel and staff of the credit business department of a commercial bank, and their close relatives;

(2)

the company, enterprise or other economic organization wherein the aforesaid persons have made investment or assumed senior managerial positions.

Article 41

No organization or individual may force a commercial bank to extend a loan or provide guarantee for a loan. A commercial bank shall have the right to refuse any organization's or individual's demand for a loan or guarantee.

A commercial bank owned solely by the state should provide loans for special projects approved by the State Council. Losses resulting from such loans shall be compensated with appropriate measures taken by the State Council. Concrete measures shall be defined by the State Council.

Article 42

A borrower shall repay the principal and interest of a loan on schedule.

When a borrower fails to repay a secured loan, the commercial bank has the right to be repaid the principal and interest of the loan or the priority of getting paid with the collateral thereof. A commercial bank shall dispose of the real estate or stocks on mortgage or pledge within a year from the date of obtaining.

A borrower shall assume the responsibility for failure to repay the unsecured loan falling due in accordance with the contract thereof.

Article 43

A commercial bank shall not engage in trust investment or stock business, or invest in real estate not for its own use within the People's Republic of China.

A commercial bank shall not invest in non-bank financial institutions or enterprises within the People's Republic of China. A commercial bank which has made investment in non-bank financial institutions or enterprises prior to the promulgation of this Law shall be subject to other provisions stipulated by the State Council.

Article 44

A commercial bank in handling settlements such as acceptance, remittance and collection shall make timely cashing and entries pursuant to relevant provisions without detaining bills or instruments or dishonoring them in violation of regulations. The relevant provisions for the time limit for bill acceptance and entries in accounting books should be made public.

Article 45

A commercial bank shall apply for approval for issuing financial bonds or seeking loans outside China in accordance with the law and administrative decrees.

Article 46

Inter-bank loan shall be subject to the time limit defined by the People's Bank of China and the maximum time for such financing shall not exceed four months. It is prohibited to use call money to extend loans on fixed assets or to make investment.

The call money for lending shall be only the idle fund after depositing required reserve, leaving adequate standby reserve and repayment of loans falling due to the People's Bank of China. The call money for borrowing shall be used to meet the position shortage in interbranch settlement and interbranch remittance and temporary needs for turnover of funds.

Article 47

A commercial bank shall not receive money deposits or extend loans by raising or lowering interest rates or by other unjustifiable means in violation of regulations.

Article 48

An enterprise or undertaking may open a principal account with a commercial bank of its own choice for day to day transfer and settlement of accounts and cash receipt and payment, but it shall not open two or more principal accounts.

No organization or individual shall deposit the fund of an organization in an account opened in the name of an individual.

Article 49

A commercial bank shall fix its business hours to the convenience of its clients and make public announcement thereof. A commercial bank shall conduct its business during its announced business hours and shall not suspend business or shorten its business hours at will.

Article 50

A commercial bank shall collect commission fees on handling business and providing services in accordance with the stipulations of the People's Bank of China.

Article 51

A commercial bank shall preserve all the financial statements, business contracts and other information for a specified period in accordance with relevant state regulations.

Article 52

The staff of a commercial bank shall abide by the law, administrative decrees and regulations and other rules for the administration of various businesses and shall not have wrong conducts listed below:

(1)

taking advantage of their positions to demand or accept bribes, or violating relevant state regulations to accept commissions or service fees under any pretext;

(2)

taking advantage of their positions to commit embezzlement, misappropriation or unlawful possession of the funds of the bank or of clients;

(3)

providing loans or guarantee to relatives or friends in violation of regulations;

(4)

holding positions concurrently at other economic institution(s);

(5)

other acts in violation of the law, administrative decrees and regulations and rules in business management.

Article 53

The staff of a commercial bank shall not disclose state secrets or commercial secrets which they come into possession during their service in the bank.

Chapter V Financial Accounting

Article 54

A commercial bank shall establish and improve its financial accounting system in accordance with the law and the state unified accounting standards as well as the relevant stipulations of the People's Bank of China.

Article 55

A commercial bank shall, in accordance with relevant state regulations, truthfully and in an all-round way record and reflect its business activities and financial position, produce its annual financial accounting report and timely submit its financial statements to the People's Bank of China and the treasury department. A commercial bank shall not establish accounting books other than those legally specified.

Article 56

A commercial bank shall announce its business performance and audited statement of the previous fiscal year within three months after the end of every fiscal year in accordance with the stipulations of the People's Bank of China.

Article 57

A commercial bank shall retain a reserve against bad and doubtful accounts and write off bad debts in pursuance of relevant state regulations.

Article 58

The fiscal year of a commercial bank begins on the first of January and ends on the thirty-first of December of the Gregorian calendar.

Chapter VI Supervision and Administration

Article 59

A commercial bank shall formulate its business rules, establish and improve its business management, the system of cash control and its security system in accordance with the stipulations of the People's Bank of China.

Article 60

A commercial bank shall establish and improve its systems of examining and checking deposits, loans and settlement, bad and doubtful accounts and other business activities.

A commercial bank shall conduct regular examination and checks on its branches.

Article 61

A commercial bank shall periodically submit to the People's Bank of China balance sheets, profit and loss statements and other financial statements and information.

Article 62

The People's Bank of China is authorized to exercise examination of and supervision over the deposits, loans, settlements and bad and doubtful accounts of a commercial bank at any time in accordance with the provisions of Chapter III, Chapter IV and Chapter V of this Law. The personnel in charge of the examination and supervision should produce legitimate certificates at the time of conducting examination and supervision. A commercial bank shall provide financial accounting information, business contracts and other information about its business and management at the request of the People's Bank of China.

Article 63

A commercial bank is subject to the audit control by the auditing authorities in accordance with the audit law and regulations.

Chapter VII Takeover and Termination

Article 64

When a commercial bank is in or is liable to be in a credit crisis thus seriously threatening the interests of the depositors, the People's Bank of China may take over the said bank.

The purpose of the takeover is to take necessary measures with regard to the commercial bank taken over in order to protect the interests of the depositors and help the commercial bank resume its normal operation. The debtor-creditor relationship of the commercial bank existing before the takeover remains unchanged.

Article 65

The People's Bank of China shall determine a takeover and organize its implementation. The People's Bank of China shall specify the following contents in its takeover decision:

(1)

the name of the commercial bank to be taken over;

(2)

the reason(s) for the takeover;

(3)

the organization of the takeover;

(4)

the time limit of the takeover.

The decision for the takeover shall be made public by the People's Bank of China.

Article 66

A takeover begins on the day of implementation of the takeover decision.

The organization in charge of the takeover shall begin exercising the power over the management of the commercial bank from the day of implementing the takeover decision.

Article 67

On expiration of the term of the takeover, the People's Bank of China may determine to prolong the takeover, but the term shall not exceed two years to the maximum.

Article 68

Takeover shall be terminated in any of the following cases:

(1)

that the term of the takeover expires or the prolonged term of takeover determined by the People's Bank of China expires;

(2)

that prior to the expiration of the term of takeover, the commercial bank has recovered its capacity of normal operation; or

(3)

that prior to the expiration of the term of takeover, the commercial bank has been merged or declared bankrupt in accordance with the law.

Article 69

When a commercial bank splits, or merges with another one, or dissolves on reasons for dissolution pursuant to the statute of the bank, it shall submit an application to the People's Bank of China with reasons for the dissolution and a plan for liquidation, including repaying the principals and interests of deposits. It shall be dissolved with the approval from the People's Bank of China.

A liquidation group shall be formed to conduct liquidation and repayment of the principals and interests of deposits shall be made in time according to the plan for liquidation when a commercial bank is to be dissolved. The People's Bank of China shall oversee the liquidation through.

Article 70

When a commercial bank is closed down by order on account of its banking permit having been revoked, the People's Bank of China shall lose no time to form a liquidation group to conduct liquidation and repay the principals and interests of deposits in time according to the plan for liquidation in accordance with the law.

Article 71

When a commercial bank is incapable of repaying its mature debts, may, with the consent of the People's Bank of China, be declared bankrupt by the People's Court. When a commercial bank is declared bankrupt in accordance with the law, the People's Court may organize the People's Bank of China and other relevant departments and personnel to form a liquidation group to conduct liquidation.

At the time of bankruptcy liquidation, a commercial bank shall give priority to paying the principal and interests of savings deposits after paying the liquidation fees and its staff wages and labor insurance fees in arrears.

Article 72

A commercial bank shall be terminated on account of dissolution, being closed down by order or declared bankrupt.

Chapter VIII Legal Liability

Article 73

A commercial bank shall assume the responsibility of paying interest accrued and other civil responsibilities of compensation for damages to the property of depositors or other clients under one of the situations listed below:

(1)

delaying or refusing repayment of the principal and interests of a deposit with no proper reason;

(2)

refusing to cash checks and to debit or credit accounts in violation of regulations regarding bill acceptance and other settlements or intentionally delaying to accept bills or instruments or dishonoring a bill in violation of the regulations;

(3)

illegally investigating, freezing or withholding and transferring the savings deposit of an individual depositor or the deposit of an institutional depositor; and

(4)

other actions inflicting damages to depositors or other clients in violation of the provisions of this Law.

Article 74

Where one of the situations listed below occurs, the people's Bank of China may order the commercial bank to make corrections, confiscate the illegitimate gains if there is any, and mete out a fine ranging from one to five times the amount of the illegitimate gain; or, if there is no illegitimate gains, mete out a fine ranging from l00,000 yuan to 500,000 yuan; if the case is particularly serious or the offender fails to make correction within the specified time, the People's Bank of China may order it to suspend business and make rectification and consolidation, or revoke its banking permit; and if the case constitutes a crime, the commercial bank shall be investigated for criminal responsibilities:

(1)

issuing financial bonds or borrowing funds from outside China without official approval;

(2)

dealing in government bonds, or dealing in or acting as agent in dealing in foreign exchanges without official approval;

(3)

engaging in trust investment and stock business in the country, or making investment in real estate not for its own use;

(4)

making investment in non-bank financial institutions or enterprises in the country;

(5)

extending unsecured loans to related persons or extending loans against a collateral on more favorable conditions than to other borrowers of similar loans;

(6)

submitting false financial statements or financial statements which conceal important facts;

(7)

refusing to accept the supervision and examination by the People's Bank of China;

(8)

leasing or lending banking permit.

Article 75

When one of the situations cited in Article 73 of this Law or one of the situations listed below occurs, the People's Bank of China may order the commercial bank to make corrections, confiscate the illegitimate gains if there is any, and mete out a fine ranging from one to three times the amount of the illegitimate gain; or, if there is no illegitimate gains, mete out a fine ranging from 50,000 yuan to 300,000 yuan:

(1)

having failed to place required reserve for deposits in pursuance of the stipulations of the People's Bank of China;

(2)

having failed to abide by the stipulations on capital adequacy, the ratio between deposit and credit, the liquidity ratio, the credit ratio of a single borrower, and other rules regarding asset and liability ratio management stipulated by the People's Bank of China;

(3)

setting up a branch without official approval;

(4)

making splits or merges without official approval;

(5)

using call money longer than the designated time or using call money to extend loans on fixed assets;

(6)

receiving money deposits or extending loans by raising or lowering interest rates or by other improper means in violation of regulations.

Article 76

When a commercial bank has behavior referred to in Articles 73, 74 and 75 of this Law, the person in charge with direct responsibility and other personnel with direct responsibility shall be given disciplinary punishment; and if the case constitutes a crime, the offender(s) shall be investigated for criminal responsibilities.

Article 77

When one of the situations listed below occurs, the People's Bank of China may order the commercial bank to make corrections, confiscate the illegitimate gains if there is any, and mete out a fine ranging from one to three times the amount of the illegitimate gain; or, if there is no illegitimate gains, mete out a fine ranging from 50,000 yuan to 300,000 yuan:

(1)

using the word "bank" without official approval;

(2)

buying more than ten percent of the total shares of a commercial bank without official approval;

(3)

opening a bank account in the name of an individual with the fund of an organization.

Article 78

When a commercial bank fails to submit the relevant information to the People's Bank of China according to the relevant stipulations, or fails to report changes for approval in violation of Article 24 of this Law, the People's Bank of China shall order it to make corrections, and, if it fails to make corrections in time, mete out a fine ranging from 10,000 yuan to 100,000 yuan.

Article 79

Anyone who sets up a commercial bank without official approval or illegally receives money deposit from the public or receives money deposit from the public in disguised form shall be investigated for criminal responsibilities in accordance with the law and the said bank shall be banned by the People's Bank of China.

Anyone who counterfeits, alters or transfers the banking permit of a commercial bank shall be investigated for criminal responsibilities in accordance with the law.

Article 80

A borrower who obtains a loan by fraud thus constituting a crime shall be investigated for criminal responsibilities in accordance with the law.

Article 81

Any of the staff of a commercial bank who, by taking advantage of the convenience provided by his position in the bank, extorts or accepts bribes, or accepts commissions or other fees under any pretext in violation of state regulations shall be investigated for criminal responsibilities in accordance with the law.

If a loan extended or guarantee provided in connection with a behavior cited in the previous paragraph causes a loss, the offender shall assume all or part of the responsibility for compensation.

Article 82

Any of the staff of a commercial bank who taking advantage of the convenience of the position in the bank commits embezzlement, or misappropriation or unlawfully possesses the fund of the bank or a client shall be investigated for criminal responsibilities in accordance with the law if the case constitutes a crime, or be given disciplinary punishment if it does not constitute a crime.

Article 83

Any of the staff of a commercial bank who causes a loss to the bank on accurate of his dereliction of duty shall be given disciplinary punishment; and if the case constitutes a crime, shall be investigated for criminal responsibilities in accordance with the law.

Any of the staff of a commercial bank who causes a loss by extending a loan to or providing a guarantee to a relative or friend in violation of regulations shall assume all or part of the responsibility for compensation.

Article 84

Any of the staff of a commercial bank who discloses state or commercial secrets which come into his or her possession during his or her service in the bank shall be given disciplinary punishment and, if the case constitutes a crime, shall be investigated for criminal responsibilities in accordance with the law.

Article 85

When an organization or individual forces a commercial bank to extend a loan or provide guarantee on a loan, the person in charge directly responsible and other personnel directly responsible for the incident shall be given disciplinary punishment, and, if a loss is incurred, shall be held responsible for compensation for all or part of the loss.

Any of the staff of a commercial bank failing to reject forceful demands of any organization or individual for a loan or guarantee shall be given disciplinary punishment and, if a loss is incurred, shall be held responsible for appropriate compensation.

Article 86

If a commercial bank and its staff are not reconciled to the penalty meted out by the People's Bank of China, they may bring a suit to the People's Court in accordance with the Administrative Procedure Law of the People's Republic of China.

Chapter IX Supplementary Provisions

Article 87

Commercial banks which have been established with official approval in pursuance of the stipulations by the State Council prior to the promulgation of this Law may not undergo formalities for examination and approval again.

Article 88

If laws and administrative decrees have special stipulations regarding banks of foreign capital, Chinese-foreign joint banks and branches of banks of foreign countries under jurisdiction of the provisions of this Law, those special stipulations shall apply.

Article 89

The relevant provisions of this Law are applicable to urban and rural credit cooperatives in their deposit, loan and settlement businesses.

Article 90

The relevant provisions of this Law are applicable to the postal deposit and remittance business of postal enterprises.

Article 91

This Law shall enter into force as of July 1,1995.