Laws of the People's Republic of China

    Article 1  These Provisions are formulated in accordance with the
Commercial Bank Law of the People's Republic of China and the Regulations on
Supervision and Management of State-owned Enterprises Property and for the
purpose of deepening the reform of the banking system, establishing boards of
supervisors in solely state-owned commercial banks and perfecting the
supervision mechanism in solely state-owned commercial banks.

    Article 2  A board of supervisors in any solely state-owned commercial
bank (hereinafter referred to as "a board of supervisors") is an organization
that, stationed by the People's Bank of China in a solely state-owned
commercial bank under the authorization of the State Council, exercises
supervision over the assets quality and conditions of preservation and
appreciation of the value of state-owned assets in the solely state-owned
commercial bank.

    Article 3  The main responsibilities of a board of supervisors are as
follows:

    (1) examining the financial statements of the solely state-owned
commercial bank and supervising and evaluating the quality of credit assets,
ratio management between assets and debts and the conditions of preservation
and appreciation of the value of state-owned assets in the solely state-owned
commercial bank;

    (2) carrying out supervision and evaluation of the business performance of
the chairman or president of the solely state-owned commercial bank and
proposing for his or her appointment and relief of the post, rewards and
penalties;

    (3) carrying out supervision over acts of the chairman or president who
performs the functions of the solely state-owned commercial bank and, may
require him or her to make corrections if he or she commits acts violating
laws, administrative regulations or rules of the bank; and

    (4) when necessary, proposing a meeting of the board of directors or of
high-ranking managerial staff of the solely state-owned commercial bank to
discuss major problems in operations and management.

    Article 4  A board of supervisors shall be responsible to the People's
Bank of China and report on its work to the People's Bank of China at regular
intervals.

    The People's Bank of China should report on the work of boards
of supervisors to the State Council at regular intervals.

    Article 5  A board of supervisors shall be composed of the following
members:

    (1) one representative from the People's Bank of China;

    (2) one representative each from the Ministry of Finance, the State
Economic and Trade Commission, the National Audit Administration and the
State Administration of State Assets;

    (3) one or two representatives from staff members of the solely
state-owned commercial bank; and

    (4) one or two experts in economics or law.

    Article 6  Any supervisor of a solely state-owned commercial bank should
fulfil the following requirements:

    (1) impartial and honest, faithful in the discharge of his duties and free
of violation of laws or discipline on record;

    (2) having an educational background of a graduate from economic or law
faculty of a university or above and engaged in economic or legal work for
more than 10 years;

    (3) having an excellent understanding of macro-policies, comprehensive
mastery of knowledge in the field of banking, financial accounting and law and
rich experiences in theory and practice of economic management; and

    (4) other requirements stipulated by the People's Bank of China.

    Article 7  Representatives from the different departments in a board of
supervisors shall be nominated by these departments and appointed by the
People's Bank of China upon verification of their qualifications.

    Representatives from staff members of a solely state-owned commercial bank
in its board of supervisors shall be elected democratically by staff members
of the bank and appointed by the People's Bank of China upon verification of
their qualifications.

    Experts in economics or law in a board of supervisors shall be recommended
by the relevant departments and units and appointed by the People's Bank of
China upon verification of their qualifications.

    The People's Bank of China shall submit the list of members of the board
of supervisors to the State Council for the record.

    Article 8  The chairman of a board of supervisors shall be nominated from
among the supervisors by the People's Bank of China and submitted to the State
Council for the appointment.

    Article 9  The chairman of a board of supervisors holds a full-time
position and other supervisors on the board hold part-time positions.

    Article 10  The high-ranking managerial staff and the person in charge of
financial affairs in a solely state-owned commercial bank shall not
concurrently serve as supervisors of their own bank.

    Article 11  The term of office of a supervisor shall be three years. A
supervisor may, if approved through verification by the People's Bank of China
upon the expiration of the term of office, serve consecutive terms but shall
serve no more than two consecutive terms.

    Article 12  If the chairman of a board of supervisors no longer meets the
requirements for the position before the expiration of the term of office, the
People's Bank of China shall report to the State Council for relief of the
post.

    If any other supervisor on a board of supervisors no longer meets the
requirements for the position before the expiration of the term of office, the
People's Bank of China shall remove him or her from office upon verification
and report to the State Council for the record.

    Article 13  The meeting of a board of supervisors shall be convened once
a quarter. Upon proposal made by the chairman of the board of supervisors or
one-third or more of supervisors, an interim meeting may be convened.

    Article 14  The meeting of a board of supervisors can be held only if
two-thirds or more of the supervisors are present.

    Any resolution of a board of supervisors becomes effective with the
consent of more than half of all the supervisors.

    Article 15  The chairman of a board of supervisors may attend major
working meetings convened by the People's Bank of China.

    Article 16  Members of a board of supervisors have the following rights
for the performance of functions and responsibilities:

    (1) attending major working meetings and business meetings convened by
the solely state-owned commercial bank, and understanding and mastering in
time related economic and financial policies;

    (2) consulting financial accounts and related information of the solely
state-owned commercial bank;

    (3) addressing inquiries to high-ranking managerial staff and relevant
professionals of the solely state-owned commercial bank; and

    (4) putting forth proposals for the operations and management of the
solely state-owned commercial bank.

    Article 17  Members of a board of supervisors shall not reveal business
secrets of the solely state-owned commercial bank.

    Article 18  Neither a board of supervisors nor its supervisors have the
right to interfere with autonomous management of the solely state-owned
commercial bank.

    Article 19  With the exception of the representative(s) appointed as a
supervisor(s) from among staff members of a solely state-owned commercial
bank, no other member of the board of supervisors shall accept remuneration
of the solely state-owned commercial bank.

    Article 20  The People's Bank of China shall bear the expenses necessary
for the performance of functions and responsibilities of a board of
supervisors.

    Article 21  Matters related to a board of supervisors not stipulated in
these Provisions shall be handled in accordance with the relevant provisions
of the Regulations on Supervision and Management of State-owned Enterprises
Property.

    Article 22  The People's Bank of China shall be responsible for
organizing the implementation of these Provisions.

    Article 23  These Provisions shall enter into force as of the date of
promulgation.