Laws of the People's Republic of China

China Banking Regulatory Commission

Order of China Banking Regulatory Commission

No. 3

The "Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative Financial Institutions", which were adopted at the 40th chairman's meeting of China Banking Regulatory Commission on November 10, 2005, are hereby promulgated, and shall come into force on February 1, 2006.

Chairman Liu Mingkang

January 12, 2006

Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative Financial Institutions

Chapter I General Provisions

Article 1

The present measures are formulated in accordance with the "Law of the People's Republic of China on the Regulation of the Banking Industry", the "Administrative License Law of the People's Republic of China", the "Law of the People's Republic of China on Commercial Banks" as well as other laws, administrative regulations, and the relevant decisions of the State Council for the purpose of regulating China Banking Regulatory Commission (hereinafter referred to as CBRC) and its dispatched offices in their granting administrative licenses to cooperative financial institutions, clarifying the administrative licensing matters, conditions, applicable operational flows and term, and protecting the lawful rights and interests of the applicants.

Article 2

Cooperative financial institutions as mentioned in the present measures shall include: rural credit cooperatives, associate rural credit cooperative unions of the counties (cities, districts), rural credit cooperative unions of the counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities), associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), rural cooperative banks, and rural commercial banks.

Article 3

CBRC and its dispatched offices shall comply with the present measures and the "Provisions of China Banking Regulatory Commission on the Procedures for Granting Administrative Licenses" when granting administrative licenses to cooperative financial institutions.

Article 4

The following matters of a cooperative financial institution shall be subject to administrative license of CBRC or its dispatched office: establishment, modification or termination of the institution, adjustment of the business scope, addition of new varieties of business, qualifications for holding the positions of council members (directors) and senior managers, and so on.

Article 5

An applicant shall submit the application materials in accordance with the "Catalogue of China Banking Regulatory Commission on Application Materials for Administrative Licensing Matters and the Format Requirements".

Chapter II Establishment of Legal Person Institutions

Section 1 Establishment of Rural Credit Cooperatives

Article 6

For the establishment of a rural credit cooperative, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 500 initiators;

(3)

The minimum amount of registered capital shall be RMB 1 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 7

For the establishment of a rural credit cooperative, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(2)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(3)

It has an effective capital restraint and supplement mechanism;

(4)

It contain no shares held by the local people's government in the form of fiscal funds; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 8

For the establishment of a rural credit cooperative, there shall be qualified initiators. Such initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions and other initiators acknowledged by CBRC.

The expression "overseas financial institutions" as mentioned in the preceding paragraph shall include the financial institutions from Hong Kong, Macao and Taiwan regions.

Article 9

A natural person initiator shall meet the following conditions:

(1)

He has full capacity for civil conduct;

(2)

He has good social prestige as well as honesty and credibility records;

(3)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others;

(4)

He is a resident of the locality of the rural credit cooperative to be established, or a non-local resident who has a fixed domicile at the said locality and has resided for at least 3 years; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 10

The proportion of the shares of a single natural person shall not exceed 2%, and the proportion of the total shares of employees shall not exceed 25%.

Article 11

As an initiator, a domestic non-financial institution shall meet the following conditions:

(1)

It has been registered in the administrative department for industry and commerce, and has the status as a legal person;

(2)

It has good social prestige, honesty and credibility records, as well as tax payment records;

(3)

It is in good financial situation, and made profits continuously in the latest 2 accounting years;

(4)

It has strong management capabilities and fund strength;

(5)

After the year-end distribution of profits, its net assets reach 30% of the total assets or even higher (by standard of consolidated accounting statements);

(6)

The balance of its equity investments shall generally not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements);

(7)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others;

(8)

Its place of registration is within the jurisdiction of the rural credit cooperative to be established; and

(9)

Other conditions on prudence as prescribed by CBRC.

Article 12

The proportion of the total shares of a single domestic non-financial institution and its associated parties shall not exceed 10%.

Article 13

As an initiator, a domestic financial institution shall meet the following conditions:

(1)

Its capital adequacy ratio shall not be lower than 8% if it is a bank, and the total amount of its capital shall not be lower than 10% of the total amount of its risk-weighted assets if it is a non-bank financial institution;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements);

(3)

It made profits continuously in the latest 2 accounting years;

(4)

It has good corporate governance, as well as sound and effective internal control rules;

(5)

Its main prudent regulatory indices meet the regulatory requirements; and

(6)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), associate rural credit cooperative unions of the prefectures (cities), or associate rural credit cooperative unions of the counties (cities, districts) may hold shares of a rural credit cooperative.

Article 14

The proportion of the total shares of a single domestic financial institution and its associated parties shall not exceed 20%.

Article 15

As an initiator, an overseas financial institution shall meet the following conditions:

(1)

Its total year-end assets in the latest year shall generally be no less than 1,000 million USD;

(2)

If it is an international rating institution acknowledged by CBRC, its long-term credit was rated by CBRC as good in the latest 2 years;

(3)

It has been keeping a favorable balance in the latest 2 accounting years;

(4)

Its capital adequacy ratio shall reach the average level of capital adequacy ratio for the banking sector at the place of its registration and shall not be lower than 8% if it is a bank, or the total amount of its capital shall not be lower than 10% of the total amount of risk-weighted assets if it is a non-bank financial institution;

(5)

It has sound internal control rules;

(6)

The financial institution at the place of registration has sound supervision and management rules;

(7)

Its home country (region) is in good economic situation; and

(8)

Other conditions on prudence as prescribed by CBRC.

CBRC may, when required by the risk situation of the financial industry and the supervision thereof, adjust the conditions for overseas financial institutions to hold the shares.

Article 16

The proportion of the shares held by a single overseas financial institution in a single rural credit cooperative shall not exceed 20%. The proportion of the total shares of more than one overseas financial institution shall not exceed 25%.

The expression "proportion of the shares" as mentioned in the preceding paragraph shall refer to the proportion of the total shares held by an overseas financial institution in a rural credit cooperative. The proportion of shares held by an associated party of the overseas financial institution shall be counted into that of the overseas financial institution.

Article 17

The establishment of a rural credit cooperative shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural credit cooperative, a preparatory establishment team shall be formed, and the initiators of the rural credit cooperative shall entrust the preparatory establishment team as the applicant.

Article 18

The application for preparatory establishment of a rural credit cooperative within the jurisdiction of a banking regulatory branch office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory branch office) shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the supervisory office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory office) for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for the preparatory establishment of a rural credit cooperative within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 19

The term of preparatory establishment of a rural credit cooperative shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit the application for postponing the preparatory establishment to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 20

The application of a rural credit cooperative within the jurisdiction of a banking regulatory branch office for the initiation of business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a rural credit cooperative within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 21

A rural credit cooperative shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to apply for a business license.

A rural credit cooperative shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit the application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural credit cooperative fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 2 Establishment of Rural Associate Credit Cooperative Unions of Counties (Cities, Districts)

Article 22

For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

The associate union is established by means of initiation and there are no less than 8 rural credit cooperatives within the jurisdiction;

(3)

The minimum amount of its registered capital is RMB 1 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 23

For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 24

For the establishment of an associate rural credit cooperative union of a county (city, district), there shall be qualified initiators, and the initiators shall be rural credit cooperatives within the jurisdiction.

The employees of an associate rural credit cooperative union of a county (city, district) may hold shares by centralizing their funds.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or associate rural credit cooperative unions of the prefectures (cities) shall hold shares of an associate rural credit cooperative union of a county (city, district).

Article 25

As an initiator, a rural credit cooperative shall meet the following conditions:

(1)

The place of registration is located within the jurisdiction of the associate rural credit cooperative union of the county (city, district) to be established;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments); and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 26

A single rural credit cooperative shall hold no less than 50,000 shares, and the proportion of its shares shall not exceed 20%.

Article 27

Any of the employees of a shareholding associate rural credit cooperative union of a county (city, district) shall meet the following conditions:

(1)

He has full capacity for civil conduct;

(2)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others; and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 28

The proportion of the shares of a single employee shall not exceed 2%, and the proportion of the total shares of all employees shall not exceed 25%.

Article 29

The establishment of an associate rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of an associate rural credit cooperative union of a county (city, district), a preparatory establishment team shall be formed, and the initiators of the associate rural credit cooperative union of the county (city, district) shall entrust the preparatory establishment team as the applicant.

Article 30

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 31

The term of preparatory establishment of an associate rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 32

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 33

An associate rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

An associate rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit an application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the associate rural credit cooperative union of the county (city, district) fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of the business and the financial business permit, and make an announcement.

Section 3 Establishment of Rural Credit Cooperatives of Counties (Cities, Districts)

Article 34

For the establishment of a rural credit cooperative of a county (city, district), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 1,000 initiators;

(3)

Its registered capital shall be RMB 10 million Yuan or more;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

The banking regulatory office may, in light of the actual situation of the locality of the rural credit cooperative union of the county (city, district) to be established, make a proper adjustment to the registered capital in Item (3) of the preceding paragraph, provided that the amount of registered capital shall not be less than RMB 5 million Yuan.

Article 35

For the establishment of a rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds; and

(6)

Other conditions on prudence as prescribed by CBRC.

For the establishment of a rural credit cooperative union of a county (city, district) by means of consolidation, the applicant shall meanwhile meet the following conditions in addition:

(1)

Both the rural credit cooperative and the associate rural credit cooperative union of the county (city, district) participate in the establishment voluntarily;

(2)

The associate rural credit cooperative union of the a county (city, district) has strong management capabilities;

(3)

The rural credit cooperative and the associate rural credit cooperative union of the county (city, district) make an estimation according to consolidated financial statements, which shows that it is solvent;

(4)

Its core capital adequacy ratio shall be no lower than 2%, and may continue to be raised after establishment.

Article 36

For the establishment of a rural credit cooperative union of a county (city, district), there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions, and other initiators acknowledged by CBRC.

Article 37

The initiators shall conform to the provisions in Article 9 and Articles 11 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы, the proportion of the total shares of the employees shall not exceed 25%, and the proportion of the total shares of all natural persons shall be no less than 50%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or of the associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural credit cooperative union of a county (city, district).

Article 38

The establishment of a rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural credit cooperative union of a county (city, district), a preparatory establishment team shall be formed, and the initiators of the rural credit cooperative union shall entrust the preparatory establishment team as the applicant.

Article 39

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 40

The term of preparatory establishment of a rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 41

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 42

A rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit an application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the abovementioned rural credit cooperative union fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 4 Establishment of Associate Rural Credit Cooperative Unions of the Provinces (Autonomous Regions, Municipalities Directly under the Central Government)

Article 43

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation;

(3)

The minimum amount of its registered capital is RMB 5 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has a qualified domicile, the fire prevention facilities, and other facilities relevant to its business.

Article 44

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has scientific and effective human resources management rules, and professional talents with high qualities;

(3)

It has an effective capital restraint and supplement mechanism;

(4)

It contains no shares held by the local people's government in the form of fiscal funds; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 45

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), there shall be qualified initiators. The initiators shall include: associate rural credit cooperative unions of counties (cities, districts), rural credit cooperatives of counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities), and rural cooperative banks, which are within the jurisdiction. A rural commercial bank may act as an initiator of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) at its own free will.

Article 46

An associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank, or a rural commercial bank shall, as an initiator, meet the following conditions:

(1)

Its place of registration shall be located within the jurisdiction of the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government), which is to be established;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements); and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 47

The proportion of the shares of a single associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank, or a rural commercial bank shall not exceed 10%, and the amount of shares it holds shall not exceed 30% of its paid-in capital.

Article 48

The establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a preparatory establishment team shall be formed, and the initiators of the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall entrust the preparatory establishment team as the applicant.

Article 49

The application for preparatory establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 50

The term of preparatory establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC an application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 51

The application of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 52

An associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

An associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 5 Establishment of Rural Cooperative Banks

Article 53

For the establishment of a rural cooperative bank, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation, and there shall be no less than 1,000 initiators;

(3)

The minimum amount of registered capital shall be RMB 20 million Yuan;

(4)

It has directors and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of president and vice president(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 54

For the establishment of a rural cooperative bank, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds;

(6)

It is established by means of institutional reform on the basis of an associate rural credit cooperative union, a rural credit cooperative, or a rural credit cooperative union of a county (city, district);

(7)

Prior to the establishment, the ratio of non-performing loans (five-level classification) of the associate rural credit cooperative union, which is estimated under the consolidated financial statements, shall be lower than 15%, or the ratio of non-performing loans (five-level classification) of the rural credit cooperative union shall be lower than 15%;

(8)

The core capital adequacy ratio shall be no lower than 4%, and the capital adequacy ratio shall be no lower than 8%;

(9)

The proportion of the shares to the total amount of stock capital shall be no lower than 60%;

(10)

Its owners'' equity is larger than the stock capitals;

(11)

It has the proportion and scale of granting loans to support farmers, which are determined by the shareholders'' congress and conform to the local actual situation; and

(12)

Other conditions on prudence as prescribed by CBRC.

Article 55

For the establishment of a rural cooperative bank, there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions and other initiators acknowledged by CBRC.

Article 56

The initiators must conform to Article 9 , Article 11 and Articles 13 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы; and the proportion of the shares of all employees shall not exceed 25%.

The proportion of the shares of a single domestic non-financial institution and all its associated parties shall not exceed 10%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural cooperative bank.

Article 57

The establishment of a rural cooperative bank shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural cooperative bank, a preparatory establishment team shall be formed, and the initiators of the rural cooperative bank shall entrust the preparatory establishment team as the applicant.

Article 58

A rural cooperative bank's application for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 59

The term of preparatory establishment of a rural cooperative bank shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC the application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 60

A rural cooperative bank's application for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 61

A rural cooperative bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural cooperative bank shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural cooperative bank fails to initiate its business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 6 Establishment of Rural Commercial Banks

Article 62

For the establishment of a rural commercial bank, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the "Company Law of the People's Republic of China", the "Law of the People's Republic of China on Commercial Banks" and the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 500 initiators;

(3)

The minimum amount of its registered capital shall be RMB 50 million Yuan;

(4)

It has directors and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of president and vice president(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules;

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(9)

Other conditions prescribed by CBRC.

Article 63

For the establishment of a rural commercial bank, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds;

(6)

It is established by means of institutional reform on the basis of an associate rural credit cooperative union, a rural credit cooperative, a rural credit cooperative union, or a rural cooperative bank;

(7)

Prior to the establishment, the total assets of the associate rural credit cooperative union, which is estimated under the consolidated financial statements, shall be 1,000 million Yuan or more, and the ratio of non-performing loans (five-level classification) shall be lower than 15%, or the total assets of the rural credit cooperative union or rural cooperative bank shall be 1,000 million Yuan or more, and the ratio of non-performing loans (five-level classification) shall be lower than 15%;

(8)

Its core capital adequacy ratio shall be no lower than 4%, and its capital adequacy ratio shall be no lower than 8%;

(9)

Its owners'' equity is larger than its stock capital;

(10)

It has the proportion and scale of granting loans to support farmers, which are determined by the shareholders'' meeting and conform to the local actual situation; and

(11)

Other conditions on prudence as prescribed by CBRC.

Article 64

For the establishment of a rural commercial bank, there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions, and other initiators acknowledged by CBRC.

Article 65

The initiators must conform to Article 9 , Article 11 and Articles 13 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы; and the proportion of the total shares of all employees shall not exceed 25%.

The proportion of the total shares of a single domestic non-financial institution and all its associated parties shall not exceed 10%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or the associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural commercial bank.

Article 66

The establishment of a rural commercial bank shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural commercial bank, a preparatory establishment team shall be formed, and the initiators of the rural commercial bank shall entrust the preparatory establishment team as the applicant.

Article 67

A rural commercial bank's application for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 68

The term of preparatory establishment of a rural commercial bank shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC the application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 69

A rural commercial bank's application for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 70

A rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural commercial bank shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural commercial bank fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Chapter III Establishment of Non-legal-person Institutions

Section 1 Establishment of Branches of Rural Credit Cooperatives, and Those of Associate Rural Credit Cooperative Unions of Counties (Cities, Districts)

Article 71

For the establishment of a branch of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

The internal control rules of the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(3)

The rural credit cooperative or the associate rural credit cooperative union of the county (city, district) has good asset quality;

(4)

The rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall, if planning to establish branches, allot working capital suitable for its business scale in accordance with the provisions, provided that the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(5)

The working capital shall be no less than RMB 300,000 Yuan;

(6)

The capital adequacy ratio of the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall be no lower than 2%;

(7)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(9)

Other conditions on prudence as prescribed by CBRC.

A rural credit cooperative union of a county (city, district) shall not establish a branch.

Article 72

The establishment of a branch shall include two stages, namely, preparatory establishment and initiation of the business.

Article 73

The application for preparatory establishment of a branch within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for preparatory establishment of a branch within the jurisdiction of the city where the banking regulatory office is located, shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of acceptance, make a written decision on approval or disapproval.

Article 74

The term of preparatory establishment of a branch shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit the application for postponing the preparatory establishment to the deciding organ. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

A rural credit cooperative or an associate rural credit cooperative union of a county (city, district) shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 75

The application of a branch within the jurisdiction of the banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

The application of a branch within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 76

A rural credit cooperative or an associate rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A branch shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the rural credit cooperative or the associate rural credit cooperative union of a county (city, district) shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a branch fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 2 Establishment of Credit Cooperatives by Rural Credit Cooperative Unions of Counties (Cities, Districts)

Article 77

Where a rural credit cooperative union of a county (city, district) plans to establish a credit cooperative, it shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

The rural credit cooperative union of the county (city, district) shall, if planning to establish a credit cooperative, allot working capital suitable for its business scale in accordance with the legal provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(3)

The internal control rules of the rural credit cooperative union of the county (city, district) are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(4)

The rural credit cooperative union of the county (city, district) has good asset quality;

(5)

The capital adequacy ratio of the rural credit cooperative union of the county (city, district) shall be no lower than 4%;

(6)

Its working capital shall be no less than RMB 1 million Yuan;

(7)

It has senior managers who meet the qualification conditions for holding their respective positions;

(8)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(9)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(10)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(11)

Other conditions on prudence as prescribed by CBRC.

The banking regulatory office may, in light of the actual situation of the locality of the credit cooperative to be established by the rural credit cooperative union of the county (city, district), make proper adjustment to the minimum amount of the working capital in accordance with Item (6) of the preceding paragraph, provided that the adjusted amount shall not be less than RMB 500,000 Yuan.

Article 78

The establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of business.

Article 79

The application for preparatory establishment of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for preparatory establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 80

The term of preparatory establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative union of the county (city, district) shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ preparation the application for postponing the establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural credit cooperative union of the county (city, district) shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 81

The application of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

The application of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 82

The rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

The credit cooperative of a rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural credit cooperative union of the county (city, district) shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ an application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the credit cooperative of a rural credit cooperative union of a county (city, district) fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 3 Establishment of Representative Offices of Rural Credit Cooperative Unions of the Provinces (Autonomous Regions, Municipalities Directly under the Central Government)

Article 83

For the establishment of a representative office, the concerned rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall meet the following conditions:

(1)

It complies with the principles of high benefits and low costs;

(2)

It has senior managers who meet the qualification conditions for holding their respective positions;

(3)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(4)

No less than 80% of practitioners have engaged in financial work for at least 1 year or majoring in finance or similar field a technical secondary school diploma or above;

(5)

It has a qualified office place; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 84

An application for the establishment of a representative office by a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be submitted by the said union, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 85

Within 3 months as of the day when the banking regulatory office grants the approval, the representative office of the rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall be established.

Where the representative office of a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) is not established within the prescribed time limit, the deciding organ shall nullify the license for establishment, take back the document on ratification of the establishment, and make an announcement.

Section 4 Establishment of Sub-branches of Rural Cooperative Banks or of Rural Commercial Banks

Article 86

A rural cooperative bank or rural commercial bank that plans to establish a sub-branch shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

It shall allot working capital suitable for its business scale in accordance with the provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(3)

Its working capital shall be no less than RMB 1 million Yuan;

(4)

Its internal control rules are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(5)

It has good asset quality, and the proportion of its non-performing loans is 15% or below;

(6)

Its capital adequacy ratio shall be no lower than 8%;

(7)

It has senior managers who meet the qualification conditions for holding their respective positions;

(8)

There are no less than 2 persons who hold the positions of president and vice president(s);

(9)

No less than 80% of its practitioners have engaged in financial work for at least 1 year;

(10)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(11)

Other conditions on prudence as prescribed by CBRC.

Article 87

The establishment of a sub-branch shall include two stages, namely, preparatory establishment and the initiation of business.

Article 88

The application for preparatory establishment of a sub-branch within the jurisdiction of a banking regulatory branch office shall be submitted by the rural cooperative bank or rural commercial bank, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a sub-branch within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 89

The term of preparatory establishment of a sub-branch shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ an application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 90

The application of a sub-branch within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a sub-branch within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 91

A rural cooperative bank or rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A sub-branch shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the sub-branch fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 5 Establishment of Sub-offices of Rural Cooperative Banks and Rural Commercial Banks

Article 92

A rural cooperative bank or rural commercial bank that plans to establish a sub-office shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

Its internal control rules are sound and effective, and no serious illegal conduct, rule-breaking conduct or major case occurred in the latest 2 years;

(3)

For the establishment of the sub-office, it shall allot working capital suitable for its business scale in accordance with the provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(4)

Its capital adequacy ratio shall be no lower than 8%;

(5)

Its working capital shall be no less than RMB 500,000 Yuan;

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(7)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(8)

Other conditions on prudence as prescribed by CBRC.

Article 93

The establishment of a sub-office shall include two stages, namely, preparatory establishment and the initiation of business.

Article 94

An application for preparatory establishment of a sub-office within the jurisdiction of a banking regulatory branch office shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a sub-office within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 95

The term of preparatory establishment of a sub-office shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ the application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 96

The application of a sub-office within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a sub-office within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 97

A rural cooperative bank or rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A sub-office shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ an application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the sub-office fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 6 Establishment of Savings Houses of Cooperative Financial Institutions

Article 98

Where a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative of a county (city, district), a rural cooperative bank or a rural commercial bank plans to establish a savings house, it shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

Its internal control rules are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(3)

No less than 80% of its practitioners have engaged in financial work for at least 1 year;

(4)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(5)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government) or of associate rural credit cooperative unions of the prefectures (cities) shall establish a savings house.

Article 99

The establishment of a savings house shall include two stages, namely, preparatory establishment and the initiation of business.

Article 100

The application for preparatory establishment of a savings house within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a savings house within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 101

The term of preparatory establishment of a savings house shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ the application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 102

The application of the savings house within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative, the associate rural credit cooperative union of the county (city, district), the rural credit cooperative union of the county (city, district), the rural cooperative bank or the rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of the savings house within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 103

A rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A savings house shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural credit cooperative, the associate rural credit cooperative union of the county (city, district), the rural credit cooperative union of the county (city, district), the rural cooperative bank or the rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the savings house fails to initiate its business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 7 Establishment of Self-help Banks of Cooperative Financial Institutions

Article 104

The term "self-help bank" shall refer to the unmanned business establishment of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank, which is out of the existing business places but in another independent business place and provides financial services such as currency deposit and withdrawal, grant of loans, account transfer, currency exchange, inquiry, etc., except for the automatic teller machines placed in department stores, hotels, enterprises, public institutions or other buildings for only providing services of currency deposit, account transfer and inquiry.

For the establishment of a self-help bank, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall meet the following conditions:

(1)

It has a sound rules and strong internal control capabilities, and had no illegal conduct, serious rule-breaking conduct or major case in the latest 2 years;

(2)

It has technologies and staff for providing the self-help bank services;

(3)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(4)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government) or of rural credit cooperative unions of the prefectures (cities) shall establish a self-help bank.

Article 105

An application for the establishment of a self-help bank within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for the establishment of a self-help bank within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 106

A self-help bank shall initiate its business within 3 months as of approval. In the case of any particular circumstance, the self-help bank shall, within 1 month prior to the time limit for establishment, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months. If the self-help bank fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the establishment, take back the document on ratification of the establishment and the financial business permit, and make an announcement.

After a self-help bank is established, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall timely report the information on operation of the self-help bank, the internal control management and facilities, etc. to the deciding organ.

Chapter IV Modification of Institutions

Section 1 Modification of Legal Person Institutions

Article 107

Modifications of legal person institutions shall include: modification of name, modification of domicile, modification of organizational form, modification of stock rights, modification of registered capital, amendment of articles of association, division, merger, acquisition and temporary closedown, etc.

Article 108

Where a legal person institution modifies its name, the name shall indicate the words on the type of the institution, such as "credit cooperative", "associate union", "union", "rural cooperative bank" or "rural commercial bank", etc., and shall comply with the principles of uniqueness and protection of commercial credit standing.

Article 109

The modification of the name of a rural credit cooperative, associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The modification of the name of an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The modification of the name of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The modification of the name of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 110

Where a legal person institution modifies its domicile, it shall have a qualified business place, safety protection measures and other relevant facilities for its business.

The scope of authority of administrative license for a legal person institution to modify its domicile and the time limit thereof shall be governed by Article 109 of the present measures.

Article 111

Where a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city) or a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) modifies its organizational form, or is reorganized into a rural cooperative bank or a rural commercial bank, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural cooperative banks or rural commercial banks.

Where a rural cooperative bank is reorganized into a rural commercial bank, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural commercial banks.

Where any other financial institution modifies its organizational form or is reorganized into a rural credit cooperative, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural credit cooperatives.

Article 112

Where a rural credit cooperative, an rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank modifies its equity structure (without modifying its registered capital), the qualification conditions for its members (shareholders) shall be the same as those prescribed in Article 9 , Article 11 and Article 13 of the present measures for initiators to hold shares.

Where a rural credit cooperative, a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank changes any member (shareholder) who holds no less than 5% of the total amount of capital or shares, it must be subject to examination and approval.

Where a rural credit cooperative or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office changes any member who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office changes any shareholder who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where a rural credit cooperative, a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial banks within the jurisdiction of the city where the banking regulatory office is located changes any member (shareholder) who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 113

Where an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) plans to modify its equity structure, it shall meet the following conditions:

(1)

The assignment of stock rights by the associate rural credit cooperative union of a county (city, district) shall conform to Article 37 of the present measures;

(2)

The proportion of the stock rights assigned by the associate rural credit cooperative union of a prefecture (city), or the proportion of shares held by a single associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank shall not exceed 10%, and the amount of its shares shall not exceed 50% of the paid-in capital; and

(3)

The assignment of stock rights by a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall conform to Article 47 of the present measures.

Where an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office plans to change any member (by way of assignment of stock rights between rural credit cooperatives) who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the banking regulatory branch office plans to change any member who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the city where the banking regulatory office is located plans to change any member (by way of assignment of stock rights between rural credit cooperatives) who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) plans to change any member who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 114

The assignment of stock rights to an overseas financial institution shall meet the conditions prescribed in Articles 15 and 16 of the present measures for initiators to hold shares.

The assignment of stock rights to an overseas financial institution shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 115

The scope of authority of administrative license for the increase of registered capital with common reserve or profits and the time limit thereof shall be governed by Article 109 of the present measures.

Article 116

Where a legal person institution modifies its registered capital by allotment of shares, its share allotment scheme shall be subject to the examination and approval prior to the modification of the registered capital.

The qualifications of the members (shareholders) and the stock capital structure after the allotment of shares shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

The examination and approval of the share allotment scheme, the scope of authority of administrative license for modification of the registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

Article 117

Where a legal person institution plans to modify its registered capital by raising new shares, the share raising scheme shall be subject to the examination and approval prior to the modification of the registered capital.

The qualifications for members (shareholders) and the stock capital structure after the raise of new shares shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

The examination and approval of the share raising scheme, the scope of authority of administrative license for modification of the registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

The application for domestic or overseas listing or for an overseas financial institution to hold the shares shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 118

Where a legal person institution plans to decrease its registered capital, the scheme on decrease of registered capital shall be subject to examination and approval prior to the modification of the registered capital.

The decrease of registered capital shall meet the following conditions:

(1)

The registered capital after the modification shall meet the requirement on minimum registered capital;

(2)

After the modification of the registered capital, the capital adequacy ratio and other regulatory indices shall conform to prudential management rules;

(3)

After the modification of the registered capital, the qualifications for members (shareholders) and the stock capital structure shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures;

(4)

The registered capital shall not be decreased in case of deficiency in the last year; and

(5)

The decrease of registered capital meets legal procedures.

The examination and approval of the scheme on the decrease of registered capital, the scope of authority of administrative license for modification of registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

Article 119

Where a legal person institution plans to amend its articles of association, its scope of authority of administrative license and the time limit thereof shall be governed by Article 109 of the present measures.

Where a legal person institution's modification of its name, domicile, stock rights or registered capital upon approval of CBRC or any of Cork's dispatched offices involves amendment of the articles of association, the legal person institution shall, within 3 months after the deciding organ makes the decision on approval, submit the amended articles of association to the deciding organ for archival filing.

Article 120

The split-up of a legal person institution shall meet the following conditions:

(1)

The split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The split-up of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The legal person institution shall meet the requirements on minimum registered capital after the split-up;

(4)

The legal person institution's capital adequacy ratio and other regulatory indices after the split-up conform to prudential management rules;

(5)

The qualifications and number of members (shareholders) as well as the stock capital structure after the split-up shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures; and

(6)

The legal person institution meets other conditions for the establishment of legal person institutions.

The application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for split-up of an associate rural credit cooperative union of a prefecture (city), or of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for split-up of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where, after the split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the successor is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures; while the newly established party shall apply for administrative license pursuant to the conditions and procedures for the legal person institution to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution.

Where, after expiry of the time limit for announcement of the division of a rural commercial bank, the successor is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures. The newly established party shall apply for an administrative license pursuant to the conditions and procedures for the legal person institution to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution.

Article 121

The split-up of a legal person institution shall meet the following conditions:

(1)

The split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The split-up of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The legal person institution shall meet the requirements on minimum registered capital after the split-up;

(4)

The legal person institution's capital adequacy ratio and other regulatory indices after the split-up shall conform to prudential management rules;

(5)

The qualifications and number of members (shareholders) as well as the stock capital structure after the split-up shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures; and

(6)

The legal person institution meets other conditions for establishment of legal person institutions.

An application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for split-up of an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for split-up of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

After the split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the newly established party shall apply for an administrative license pursuant to the conditions and procedures for legal person institutions to initiate the business. The subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution. The former legal person institution shall apply for administrative license pursuant to conditions and procedures for dissolution of legal person institutions, and timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

After expiry of the time limit for announcement the division of a rural commercial bank, the newly established party shall apply for the administrative license pursuant to the conditions and procedures for legal person institutions to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution. The former legal person institution shall apply for the administrative license pursuant to the conditions and procedures for dissolution of legal person institutions, and timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Article 122

The merger of a legal person institution shall meet the following conditions:

(1)

The merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous regions municipality directly under the Central Government), or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The merger of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The merging party's capital adequacy ratio and other regulatory indices after the merger shall conform to prudential management rules;

(4)

The qualifications for members (shareholders) and the stock capital structure after the merger shall conform to the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

An application for the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

An application for the merger of an associate rural credit cooperative union of a prefecture (city), or an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The merger of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where, after the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the merging party is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures. If the merged party needs to be reconstructed into a non-legal-person institution after dissolution, it shall apply for the administrative license pursuant to the conditions and procedures for renaming non-legal-person institutions, and the subordinate non-legal-person institution may be renamed once for all as the merging party's non-legal-person institution. When the merged party is dissolved, it shall timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Where, after expiry of the time limit for announcement the merger of a rural commercial bank, the merging party is changed, it shall apply for administrative license pursuant to the modification conditions and procedures. If the merged party needs to be reconstructed into a non-legal-person institution after the dissolution, it shall apply for the administrative license pursuant to the conditions and procedures for renaming non-legal-person institutions, and the subordinate non-legal-person institution may be renamed once for all as the merging party's non-legal-person institution. When the merged party is dissolved, it shall timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Article 123

The consolidation of a legal person institution shall meet the following conditions:

(1)

The consolidation of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The consolidation of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The capital adequacy ratio and other regulatory indices of the newly established institution after the consolidation shall conform to prudential management rules;

(4)

The qualifications for members (shareholders) and the stock capital structure after the consolidation shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures; and

(5)

The consolidation shall meet other conditions for establishment of legal person institutions.

The scope of authority of administrative license for consolidation and the implementation procedures shall be the same as those for establishment of legal person institutions, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution.

A dissolved institution shall timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Article 124

Where a legal person institution plans to acquire another financial institution within the jurisdiction, it shall meet the following conditions:

(1)

The acquisition of another financial institution by a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The acquisition of another financial institution by a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

It shall comply with the principles of voluntariness and market orientation; and

(4)

The acquiring party's main regulatory indices after the acquisition shall conform to prudential management rules.

The application for acquisition of another financial institution by a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for acquisition of another financial institution by a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where, after the acquisition is approved, the acquired party needs to be reconstructed into a non-legal-person institution, it shall apply for administrative license pursuant to the conditions and procedures for renaming non-legal-person institutions, and the non-legal-person institution may be renamed once for all as the acquiring party's non-legal-person institution. When the acquired institution is dissolved, it shall timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Article 125

The continuous suspension of business of the head office of a cooperative financial institution for 3 days to 6 months shall be a temporary closedown. For the temporary closedown of the head office of a cooperative financial institution, the legal person institution shall act as the applicant.

The application for temporary closedown of the head office of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 10 days as of the acceptance, make a decision on approval or disapproval.

The application for temporary closedown of the head office of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 10 days as of the acceptance, make a decision on approval or disapproval.

Where the term of an approved temporary closedown has expired or the causes leading to temporary closedown have been eliminated, the institution of temporary closedown shall resume its business, and the former applicant shall report to the deciding organ within 5 days after the resumption of business. If the business place is rebuilt, the former applicant shall not resume its business until having provided the deciding organ with the proof materials showing that the business place meets the conditions on safety, fire prevention, ownership (use right) and for the initiation of business. If the term of temporary closedown needs to be extended due to any particular circumstance, the said institution shall file an application anew pursuant to the procedures in the preceding paragraph.

Section 2 Modification of Non-legal-person Institutions

Article 126

Modifications of a non-legal-person institution shall include: change of the name, change of the business place, upgrading, degradation, and temporary closedown, etc. of the institution.

Article 127

Where a non-legal-person institution modifies its name, the name shall indicate the words on the nature of the institution, such as "credit cooperative", "branch", "savings house", "representative office", "sub-branch", "sub-office" or "self-help bank"; and shall comply with the principles of uniqueness and protection of commercial credit standing.

The application for modification of the name of a branch, credit cooperative of a rural credit cooperative union of a county (city, district), sub-branch, sub-office, savings house or self-help bank within the jurisdiction of the banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for modification of the name of a branch, credit cooperative of a rural credit cooperative union of a county (city, district), sub-branch, sub-office, savings house, self-help bank or the representative office of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 128

Where a non-legal-person institution plans to modify its business place, it shall have qualified business place, safety protection measures and other relevant facilities for its business.

The application for modification of the business place of a branch, credit cooperative of a rural credit cooperative union of a county (city, district), sub-branch, sub-office, savings house or self-help bank within the jurisdiction of the banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for modification of the business place of a branch, credit cooperative of a rural credit cooperative union of a county (city, district), sub-branch, sub-office, savings house, self-help bank or the representative office of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 129

Where the savings house of a rural credit cooperative or of an associate rural credit cooperative union of a county (city, district) is upgraded into a branch, it shall meet the conditions for establishment of branches. If the savings house of an associate rural credit cooperative union of a county (city, district) is upgraded into a credit cooperative, it shall meet the conditions for establishment of credit cooperatives. If the non-legal-person institution of a rural cooperative bank or rural commercial bank is upgraded, it shall meet the conditions for establishment of sub-branches or sub-offices.

The application for upgrading the savings house of a rural credit cooperative, or of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office into a branch, the application for upgrading the savings house of a rural credit cooperative union of a county (city, district) into a credit cooperative, or the application for upgrading the savings house of a rural cooperative bank or rural commercial bank into a sub-office, shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for upgrading the sub-office of a rural cooperative bank or rural commercial bank within the jurisdiction of a banking regulatory branch office into a sub-branch shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for upgrading the savings house of a rural credit cooperative or of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located into a branch, the application for upgrading the savings house of a rural credit cooperative union of a county (city, district) into a credit cooperative, the application for upgrading the savings house of a rural cooperative bank or rural commercial bank into a sub-office, or the application for upgrading a sub-office into a sub-branch, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 130

The application for degrading the branch of a rural credit cooperative, or of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office into a savings house, the application for degrading the credit cooperative of a rural credit cooperative union of a county (city, district) into a savings house, the application for degrading the sub-branch of a rural cooperative bank or rural commercial bank into a sub-office or a savings house, or the application for degrading a sub-office into a savings house, shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for degrading the branch of a rural credit cooperative or of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located into a savings house, the application for degrading the credit cooperative of a rural credit cooperative union of a county (city, district) into a savings house, the application for degrading the sub-branch of a rural cooperative bank or rural commercial bank into a sub-office or savings house, or the application for degrading a sub-office into a savings house, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 131

The continuous suspension of business of the non-legal-person institution of a cooperative financial institution for 3 days to 6 months shall be a temporary closedown. For the temporary closedown of the non-legal-person institution of a cooperative financial institution, the legal person institution shall act as the applicant.

The application for temporary closedown of the non-legal-person institution of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 10 days as of the acceptance, make a written decision on approval or disapproval.

The application for temporary closedown of the non-legal-person institution of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 10 days as of the acceptance, make a written decision on approval or disapproval.

Where the term of an approved temporary closedown has expired or the causes leading to temporary closedown have been eliminated, the institution of temporary closedown shall resume its business, and the former applicant shall report to the deciding organ within 5 days after resumption of the business. If the business place is rebuilt, the former applicant shall not resume its business until having provided the deciding organ with the proof materials showing that the business place meets the conditions on safety, fire prevention, ownership (use right) and for the initiation of business. If the term of temporary closedown needs to be extended due to a particular circumstance, the said institution shall file an application anew pursuant to the procedures in the preceding paragraph.

Chapter V Termination of Institutions

Section 1 Termination of Legal Person Institutions

Article 132

Where a legal person institution is under any of the following circumstances, it shall apply for dissolution:

(1)

The term of business as prescribed in its articles of association has expired or any other cause of dissolution as prescribed in the articles of association arises;

(2)

The members'' or shareholders'' meeting (congress) adopts the resolution on the dissolution; or

(3)

It needs to be dissolved due to division or merger.

The application for dissolution of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for dissolution of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for dissolution of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for dissolution of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The deciding organ shall take charge of confirming the members of the liquidation team and supervising the process of dissolution and liquidation.

Where an institution is dissolved due to division or merger, the dissolution shall be subject to examination and approval along with the division or merger.

Article 133

Where a legal person institution is under any of the following circumstances, it shall, before applying to the court for bankruptcy, apply to CBRC and get the approval:

(1)

It is unable to pay the due debts, and is willing or is required by its creditors to apply for bankruptcy;

(2)

It is liquidated due to dissolution, and ought to apply for bankruptcy since the liquidation team finds that the institution's properties are not enough to pay off the debts.

The application of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a rural cooperative bank or a rural commercial bank for pre-bankruptcy approval shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 2 Termination of Non-legal-person Institutions

Article 134

Where the non-legal-person institution of a cooperative financial institution terminates its business (except for being revoked in accordance with the law), the legal person institution shall submit an application for terminating the business.

Article 135

The application of a branch, the credit cooperative of a rural credit cooperative union of a county (city, district), a sub-branch, a sub-office, a savings house or a self-help bank within the jurisdiction of a banking regulatory branch office for termination of business shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application of a branch, the credit cooperative of a rural credit cooperative union of a county (city, district), a sub-branch, a sub-office, a savings house or a self-help bank within the jurisdiction of the city where the banking regulatory office is located for termination of business shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for termination of the representative office of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Chapter VI Adjustment of the Business Scope and Addition of Varieties of Business

Section 1 Initiation of Foreign Exchange Business and Addition of Varieties of Foreign Exchange Business

Article 136

To apply for the initiation of foreign exchange business (except for settlement and sale of foreign exchange) or addition of varieties of foreign exchange business, the applicant shall meet the following conditions:

(1)

It abides by the laws, regulations and relevant financial rules, has no conduct damaging the interests of the state or the general public, and no major case or illegal or law-breaking conduct occurred in the latest 3 years;

(2)

The total amount of its assets is RMB 2000 million Yuan or more, its registered capital shall be no less than RMB 20 million Yuan, its core capital adequacy ratio reaches 4%, and the ratio of its non-performing loans is lower than 15%;

(3)

It shall have no less than 2 million USD of foreign exchange capital or other convertible currencies of the equivalent value;

(4)

It has a sound internal control rules, high management level, and strong risk control capacity;

(5)

It has qualified staff for foreign exchange business;

(6)

It has qualified foreign exchange settlement agency bank;

(7)

It has the business place and relevant facilities meeting the requirements for foreign exchange business; and

(8)

Other conditions on prudence as required by CBRC.

Article 137

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office for the initiation of foreign exchange business or addition of varieties of foreign exchange business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make written decision on approval or disapproval.

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the initiation of foreign exchange business or addition of varieties of foreign exchange business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Section 2 Raising Subordinated Fixed-term Debts and Issuing Subordinated Bonds

Article 138

To apply for raising subordinated fixed-term debts or issuing subordinated bonds by private placement, the applicant shall meet the following conditions:

(1)

It has classified its loans into five levels, and the result of classification is authentic and accurate;

(2)

Its core capital adequacy ratio shall be no lower than 4%;

(3)

It has adequate reserves for loan losses;

(4)

It has a good corporate governance structure; and

(5)

No major case or illegal or law-breaking conduct occurred in the latest 3 years.

The public issuance of subordinated bonds shall meet the conditions in Item (1) and Items (3) through (5) of the preceding paragraph, and the core capital adequacy ratio shall be no lower than 5%.

Article 139

The application for raising subordinated fixed-term debts or issuing subordinated bonds shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 3 Initiation of Derivative Transaction Business

Article 140

A rural cooperative bank or rural commercial bank that applies for the initiation of derivative transaction business shall meet the following conditions:

(1)

It is in good business situation, and its main risk supervisory indices meet the requirements;

(2)

It has a sound derivative transaction risk management system and internal control rules;

(3)

It has a sound business processing system for automatic connection of the front, middle and back offices of derivative transactions and a real-time risk management system;

(4)

The person-in-charge of the derivative transaction business shall have at least 5 years of experience in directly engaging in derivative transaction activities and in risk management, and has no ill records;

(5)

It has at least 2 traders who have engaged in derivative or relevant transaction for 2 years or longer, accepted special trainings on relevant skills in derivative transaction for half a year or longer, and has 1 relevant risk manager, at least 1 risk model researcher or risk analyst; all the foregoing staff shall hold their respective positions in a full-time instead of concurrent way, and none of them has any ill record;

(6)

It has the qualified transaction place and equipment; and

(7)

Other conditions on prudence as prescribed by CBRC.

Article 141

The application of a rural cooperative bank or rural commercial bank for the initiation of transaction business of derivative financial instruments shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 4 Initiation of Electronic Banking, Addition or Modification of Varieties of Electronic Banking

Article 142

The electronic banking initiated with Internet or other open network or wireless network, including online banks, mobile banks, and the electronic banks initiated with PDA such as palm computers shall be subject to examination and approval.

Article 143

To apply for the initiation of electronic banking, the applicant shall meet the following conditions:

(1)

It is in normal business operations, has established a sound risk management system and sound internal control rules, and its main information management system and business processing system met with no major breakdown within one year before it applies for the initiation of electronic banking;

(2)

It has made the overall development strategy and development planning for electronic bank, and electronic banking safety strategy, and has established the organizational system and institutional system for risk management of electronic banking;

(3)

It has, according to the development planning and safety strategy for electronic banking, built up the basic facilities and system for operation of electronic banking, and has made necessary safety check and business testing on relevant facilities and systems;

(4)

It has made a safety evaluation on risk management of electronic banking and work operation facilities and system, etc., which meets the supervisory requirements;

(5)

It has set up a specific electronic banking management department, and has been staffed with qualified managers and technicians; and (6) Other conditions on prudence as required by CBRC.

Article 144

To initiate the electronic banking business in the form of online banking or mobile banking, etc. by using Internet as the medium, the applicant shall meet the following conditions in addition:

(1)

Its basic facilities and equipment for electronic banks can guarantee the normal operations of electronic banking;

(2)

Its electronic bank system has the necessary business processing capacity, and can satisfy the customer's demand for timely business processing;

(3)

It has established an effective external attack detection mechanism; and

(4)

Its electronic banking operation system and business processing server is established within the territory of the People's Republic of China.

Article 145

To add or modify any of the following new varieties of electronic banking, the party concerned must get the approval:

(1)

the services as required by any relevant law, regulation or administrative rule to be subject to examination and approval, but which the party concerned has not applied for, and prepares to initiate by making use of electronic banks;

(2)

the services which may not be carried out until the party concerned is directly connected with the securities sector or insurance sector, etc. for real-time data exchange when applying the approved business to electronic banks;

(3)

the services to be carried out between financial institutions through the connected electronic bank platform;

(4)

trans-boundary electronic bank services; and

(5)

other varieties of business as prescribed by CBRC.

Article 146

The application for the initiation, addition or modification of varieties of electronic banking shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 5 Issuance of Bank Cards

Article 147

To apply for issuing bank cards, the applicant shall meet the following conditions:

(1)

It is in good business situation, and its main risk supervisory indices meet the requirements;

(2)

It has qualified risk management and internal control rules;

(3)

It has the technical capacity guaranteeing the safety of information and has a safe and highly efficient computer processing system;

(4)

It has qualified technicians, managers and corresponding management departments;

(5)

It has no major illegal or rule-breaking conducts within the latest 3 years;

(6)

It shall comply with relevant provisions on foreign exchange administration in addition if planning to issue foreign currency cards; and

(7)

Other conditions on prudence as prescribed by CBRC.

The rural credit cooperatives within the jurisdiction of a province, (municipality, autonomous region), their unions and the rural cooperative banks within the jurisdiction (rural commercial banks may join on a voluntary basis) may apply for bank card business by deeming the rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) as an integral entity.

Article 148

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office for the initiation of the debit card business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the initiation of the debit card business shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) for the initiation of the debit card business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for the initiation of the credit card business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 6 Initiation of the Business of Trust of Securities Investment Funds

Article 149

Where a rural cooperative bank or a rural commercial bank applies for the initiation of the business of trust of securities investment funds, it shall meet the following conditions:

(1)

In the latest 3 accounting years, its year-end net assets of each year shall be no less than RMB 2000 million Yuan, and its capital adequacy ratio shall conform to the relevant provisions of the regulatory department;

(2)

It has set up a special fund trust department, and is kept independent from other work departments;

(3)

The senior managers to be appointed in the fund trust department shall meet the legal conditions, and there shall be no less than 5 practitioners who intend to engage in fund liquidation, accounting, investment supervision, information disclosure, internal auditing and control, etc. and have the fund practicing qualifications;

(4)

It shall meet the conditions for safe custody of the fund properties:

a.

It has the equipment and facilities for engaging in the fund trust business;

b.

It sets up account for each item of fund independently, and keeps the integrity and independence of the fund assets;

c.

It strictly separates the trusted fund assets from its own assets for custody;

d.

It legally supervises the fund manager's investment operations;

e.

It legally implements the fund manager's instructions, handles and distributes the fund assets;

f.

It legally reviews and examines the net value of the fund assets, the net value of fund shares, and the prices for purchase and redemption, which are calculated by the fund manager;

g.

It keeps appropriate custody of the records, account books, statements and other relevant documents on the fund trust business activities; and

h.

It has sound rules on the trust business.

(5)

It has a safe and highly efficient liquidation and delivery system:

a.

The securities transaction settlement fund within the system shall be remitted into the account within two hours;

b.

It safely accepts transaction data from the exchange;

c.

It is linked up with the system safety of the fund manager, the fund registration institution, the securities registration settlement institution and other relevant institutions;

d.

It legally implements the fund manager's investment instructions, and timely handles the matters on liquidation and delivery.

(6)

Its fund trust department has a fixed place meeting the needs in business, and is equipped with an independent safety control system:

a.

The fund trust department's business place is relatively independent, and is equipped with an access control system;

b.

The work positions that may access to the fund transaction data are arranged in separate office rooms, and no one involved may enter such rooms at will;

c.

It has sound fund transaction data confidentiality rules;

d.

It has a safe fund trust business data backup system; and

e.

It has the plan on responding to fund trust emergencies, and has the emergency responding capacity.

(7)

The fund trust department is equipped with an independent trust technological system, and includes the network system, application system, safety protection system, and data backup system;

(8)

It has sound rules on internal auditing and control as well as risk control;

(9)

It had no illegal or serious rule-breaking conduct in the latest 3 years;

(10)

Other conditions prescribed in any law, administrative regulation or prescribed by CSRC or CBRC but approved by the State Council.

Article 150

The application of a rural cooperative bank or rural commercial bank for the initiation of the securities investment fund trust business shall be subject to the acceptance of CSRC, and be subject to the joint examination of both CSRC and CBRC for decision.

Article 151

CBRC shall, within 20 days as of receipt of the jointly signed document from CSRC, make a decision on ratification or refusal, and notify CSRC. If CBRC makes a decision on refusal, it shall explain the reason therefor in the notification.

Section 7 Initiation of Domestic Securities Investment Trust Business of Qualified Foreign Institution Investors

Article 152

Where a rural cooperative bank or a rural commercial bank applies for the initiation of the domestic securities investment trust business of qualified foreign institution investors, it shall meet the following conditions:

(1)

It has set up a special fund trust department;

(2)

Its paid-in capital conforms to the provisions in the relevant regulations;

(3)

It has enough full-time employees familiar with the trust business;

(4)

It meets the conditions for safe custody of all the fund assets;

(5)

It has the capacity for safe and highly efficient liquidation and delivery;

(6)

It has the status as a designated foreign exchange bank; and

(7)

It has no record in major violation of foreign exchange administration provisions in the latest 3 years.

Article 153

The application of a rural cooperative bank or a rural commercial bank for the initiation of the domestic securities investment trust business of qualified foreign institution investors shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 8 Initiation of National Social Security Fund Trust Business

Article 154

Where a rural cooperative bank or a rural commercial bank applies for the initiation of the national social security fund trust business, it shall meet the following conditions:

(1)

It has set up a special fund trust department;

(2)

Its paid-in capital conforms to the relevant regulations;

(3)

It has enough full-time employees familiar with the trust business;

(4)

It meets the conditions for safe custody of all fund assets; and

(5)

It has safe and highly efficient liquidation and delivery capacities.

Article 155

The application of a rural cooperative bank or a rural commercial bank for the initiation of the national social security fund trust business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 9 Initiation of Enterprise Annuity Fund Trusteeship Business

Article 156

Where a rural cooperative bank or a rural commercial bank applies for the initiation of enterprise annuity fund trusteeship business, it shall meet the following conditions:

(1)

Its registered capital shall be no less than RMB 100 million Yuan, and it maintains no less than RMB 1500 million Yuan of net assets at any time;

(2)

It has a sound corporate governance structure;

(3)

The number of its full-time employees having the qualification for practicing the enterprise annuity fund business reaches the prescribed standard;

(4)

It has qualified business place, safety protection measures and other relevant facilities for its enterprise annuity fund trusteeship business;

(5)

It has made sound rules on internal auditing and control as well as risk control;

(6)

It had no major illegal or rule-breaking conduct in the latest 3 years; and

(7)

Other conditions prescribed by the State.

Article 157

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of a banking regulatory branch office for the initiation of enterprise annuity fund trusteeship business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application of a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the initiation of enterprise annuity fund trusteeship business shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Section 10 Initiation of Offshore Banking

Article 158

Where a rural cooperative bank or a rural commercial bank applies for the initiation of offshore banking, it shall meet the following conditions:

(1)

It abides by the financial laws and regulations of the state, and had no illegal or serious rule-breaking conduct in the latest 3 years;

(2)

It has the prescribed scale of foreign exchange assets, and has good performance of foreign exchange business operation;

(3)

The foreign exchange practitioners meet the requirements for offshore banking, and have no ill records of their previous business activities; among them, each person-in-charge shall have no less than 5 years of experience in foreign exchange business, and each of 50% of other practitioners shall have no less than 3 years of experience in foreign exchange business;

(4)

It has sound internal management rules and risk control rules;

(5)

It has the place and facilities suitable for the offshore business; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 159

The application of a rural cooperative bank or rural commercial bank for the initiation of offshore banking shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 11 Initiation of Stock-Pledged Loan Business of Securities Companies

Article 160

To apply for the initiation of stock-pledged loan business, the applicant shall meet the following conditions:

(1)

It is in good business situation, and its main risk regulatory indices meet the requirements;

(2)

It has qualified risk management and internal control rules, and has made and implemented the uniform credit-granting system;

(3)

It has made the risk control measures and business operational flow relevant to the stock-pledged loan business;

(4)

It has a full-time department and staff that take charge of operating and managing the stock-pledged loan business;

(5)

It has a special business management information system, is able to simultaneously know about the stock market situation and relevant important information on listed companies, and has the capacities of analyzing and researching the classified stocks as well as determining the pledge ratio; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 161

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of a banking regulatory branch office for the initiation of stock-pledged loan business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the initiation of stock-pledged loan business shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application of an associate rural credit cooperative union of a county (city, district), or a rural credit cooperative union of a county (city, district) for the initiation of stock-pledged loan business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 12 Initiation of Credit Asset Assignment Business

Article 162

To apply for the initiation of the credit asset assignment business, the applicant shall meet the following conditions:

(1)

It has sound internal control rules, and sound rules and measures on internal control of credits;

(2)

The total amount of its assets shall be no less than RMB 5,000 million Yuan, and its core capital adequacy ratio shall be no lower than 4%;

(3)

It adopts the five-level classification system for loans, and the proportion of its non-performing loans shall be lower than 15%;

(4)

It had no major illegal or rule-breaking conduct in the latest 3 years; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 163

The application for the initiation of the credit asset assignment business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Section 13 Initiation of Personal Financial Management Business

Article 164

The initiation of the following personal financial management business shall be subject to approval:

(1)

financial management plans guaranteeing proceeds;

(2)

new investment products which are designed for personal financial management business and have the nature of guaranteeing proceeds; and

(3)

other personal financial management business which must be subject to approval of CBRC.

Article 165

To apply for the initiation of the personal financial management business, the applicant shall meet the following conditions:

(1)

It has corresponding risk management system and internal control rules;

(2)

It has senior managers and practitioners who have the work experiences and knowledge on carrying out the relevant business;

(3)

It has an effective system for identification, metrology, monitoring and control of market risks;

(4)

It has good credit standing, and had no major event damaging the interests of any customer within the latest 2 years; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 166

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office for the initiation of the personal financial management business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the initiation of the personal financial management business shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Section 14 Initiation of Business Not Clearly Prescribed in Regulations

Article 167

The applications for the initiation of any business not clearly prescribed in the presently applicable laws and regulations shall be governed by separate provisions of CBRC.

Chapter VII License of the Qualifications for Council Members (Directors) and Senior Managers to Hold Their Respective Positions

Section 1 Qualification Conditions for Holding Positions

Article 168

The council presidents, vice council presidents, independent council members and other council members of rural credit cooperatives, associate rural credit cooperative unions of counties (cities, districts), rural credit cooperative unions of counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities), associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government) must be subject to the license of qualifications for holding their respective positions; while the board chairmen, vice board chairmen, independent directors and other directors of rural cooperative banks and rural commercial banks must be subject to the license of qualifications for holding positions.

The director generals of rural credit cooperatives; the director generals, vice director generals and business department director generals of associate rural credit cooperative unions of counties (cities, districts), rural credit cooperative unions of counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities); the director generals, vice director generals, regulation compliance department persons-in-charge, representative office director generals and vice director generals of associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government); the presidents, vice presidents, chief executive officers (CEOs), chief operating officers (COOs), chief risk officers (CROs), chief technology officers (CTOs), chief financial officers, assistants to presidents, secretaries of boards of directors, business department general managers (director generals), general auditors, persons in charge of internal audit, general accountants, financial persons-in-charge and persons in charge of regulation compliance of rural cooperative banks and rural commercial banks; and the sub-branch presidents and other senior managers of rural cooperative banks and rural commercial banks must be subject to the license of qualifications for holding positions.

Those who hold none of the abovementioned positions, but who shall perform the work duties of the council members (directors) or senior managers as listed in the preceding Paragraph 2, shall be deemed as the same type of people ascertained by CBRC to be subject to the administration on the qualifications for holding positions.

Article 169

To apply for the qualification for holding the position of council member (director) or senior manager, the person planning to hold the position shall meet the following basic conditions:

(1)

It is a natural person with full capacity for civil conduct;

(2)

It abides by laws and disciplines, is honest and credible, is diligent and duteous, and has good personal virtues;

(3)

It has the knowledge, experiences and capabilities suitable for the position to be held;

(4)

It has good practicing records on economic and financial work;

(5)

It is familiar with economic and financial laws and regulations, and has good consciousness of regulation compliance management;

(6)

It is able to make sufficient information communication with the financial regulatory authority, and actively cooperates with the financial regulatory authority in the work; and

(7)

Other conditions determined by CBRC.

Article 170

Where a person intending to hold the position is under any of the following circumstances, he shall not hold the position of council member (director) or senior manager of a cooperative financial institution:

(1)

He has any record on committing a crime intentionally;

(2)

He bears personal liabilities or direct leadership liabilities for any illegal or rule-breaking business activity or any heavy loss of the institution for which he worked previously, with circumstance being serious, and was legally punished by the relevant administrative organ;

(3)

He has any conduct in violation of the principles of honesty and credibility such as providing false materials, etc. when performing the work duties;

(4)

His qualification for holding the position of council member (director) or senior manager for life is cancelled by the financial regulatory authority, or his qualification for holding the position of council member (director) or senior manager is cancelled for twice accumulatively;

(5)

He has been given administrative penalties by the financial regulatory authority for 3 times accumulatively;

(6)

He is obvious in conflict of interests on the duties with the position of council member (director) or senior manager to be held;

(7)

He has any bad conduct that seriously goes against social morality, and causes any vile effect;

(8)

He himself or his spouse has the due but unpaid debts or is engaging in investments with great risks, which are obviously beyond the capacity of his family properties; and

(9)

Other circumstances prescribed in any law or administrative regulation or by CBRC.

Article 171

To apply for the qualification for holding the position of council member (director), the person planning to hold the position shall meet the following conditions in addition to the conditions prescribed in Article169 and Article 170 :

(1)

He has no less than 5 years of work experience in law, economy, finance, accounting, or other fields favorable for performing the council member's (director's) duties;

(2)

He is able to make use of the financial institution's accounting statements and statistical statements to determine the financial institution's management and risk situation; and

(3)

He knows about the corporate governance structure, the articles of association, and the duties of the council (board of directors) of the institution where he is to hold the position.

The person planning to hold the position of independent council member (director) shall also be an expert in the field of law, economy, finance or accounting, etc., and shall conform to the provisions in the "Guidelines on Independent Director System and External Supervisor System of Joint-stock Commercial Banks".

Article 172

To apply for the qualification for holding the position of council president (chairman of the board) or vice council president (vice chairman of the board), the person planning to hold the position shall meet the following conditions as the case may be in addition to the conditions prescribed in Articles 169 through 171:

(1)

If he plans to hold the position of council president or vice council president of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), or of a board chairman or vice board chairman of a rural commercial bank, he shall have an undergraduate diploma or above, and have been engaged in financial work for 6 years or more, or have been engaged in relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(2)

If he plans to hold the position of board chairman or vice board chairman of a rural cooperative bank, or of council president or vice council president of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city), he shall have a junior college diploma or above, and have been engaged in financial work for 6 years or more, or have been engaged in relevant economic work for 10 years or more (including at least 3 years of experience in financial work); and

(3)

If he plans to hold the position of council president or vice council president of a rural credit cooperative, he shall have a technical secondary school diploma or above, and have been engaged in financial work for 4 years or more, or have been engaged in relevant economic work for 8 years or more (including at least 2 years of experience in financial work).

Article 173

To apply for the qualification for holding the position of any type of senior manager, the person planning to hold the position shall know about the duties of the position to be held, be familiar with the management framework and profit-making mode of the same type of institutions, have good knowledge of the internal control rules of the same type of institutions, and have the risk management capacity suitable for the position to be held.

Article 174

To apply for the qualification for holding the position of senior manager of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a rural cooperative bank or a rural commercial bank, the person planning to hold the position shall meet the following conditions, as the case may be, in addition to the conditions prescribed in Articles 169 through 171:

(1)

If he plans to hold the position of president, vice president, chief executive officer (CEO), chief operating officer (COO), chief risk officer (CRO), chief technology officer (CTO) or chief financial officer of a rural commercial bank, or the position of director general or vice director general of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), he shall have an undergraduate diploma or above, and have been engaged in financial work for 6 years or more, or have been engaged in relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(2)

If he plans to hold the position of president, vice president, chief executive officer (CEO), chief operating officer (COO), chief risk officer (CRO), chief technology officer (CTO) or chief financial officer of a rural cooperative bank, the position of assistant to president or secretary of board of directors of a rural cooperative bank or rural commercial bank, the position of director general or vice director general of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city), or the position of director general or vice director general of the representative office of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), he shall have a junior college diploma or above, and have been engaged in financial work for 6 years or more, or have been engaged in relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(3)

If he plans to hold the position of director general of a rural credit cooperative or of the credit cooperative of a rural credit cooperative union of a county (city, district), he shall have a technical secondary school diploma or above, and have been engaged in financial work for 4 years or more, or have been engaged in relevant economic work for 8 years or more (including at least 2 years of experience in financial work);

(4)

If he plans to hold the position of general auditor, internal audit person-in-charge, general accountant or financial person-in-charge of a rural cooperative bank or rural commercial bank, he shall have a junior college diploma or above, have obtained the nationally or internationally accredited professional title of the middle level in the field of accounting or audit, or have passed the examination (middle level) on nationally or internationally accredited professional qualification in the field of accounting or audit, and have worked on finance, accounting or audit for 6 years or more;

(5)

If he plans to hold the position of director general (general manager) of the business department of an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank, he shall have a junior college diploma or above, and have been engaged in financial work for 6 years or more, or have been engaged in relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(6)

If he plans to hold the position of regulation compliance person-in-charge of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a rural cooperative bank or a rural commercial bank, he shall have an undergraduate diploma or above, and have been engaged in financial work for 4 years or more; or

(7)

If he plans to hold the position of president of a sub-branch of a rural cooperative bank or rural commercial bank, he shall have a junior college diploma or above, and have been engaged in financial work for 4 years or more, or have been engaged in relevant economic work for 8 years or more (including at least 2 years of experience in financial work).

Article 175

Where the person planning to hold the position fails to meet the abovementioned requirement on educational background, but has got a bachelor's degree or above from an educational institution accredited by the education administrative department of the state, he shall be deemed to meet the corresponding requirement on the educational background.

Article 176

Where the person planning to hold the position fails to meet the abovementioned requirement on educational background, but has got the qualification of certified public accountant, of certified public auditor or of a senior professional post relevant to the position to be held, he shall be deemed to meet the corresponding requirement on the educational background, provided that among the qualification conditions for holding the position, his term of financial work shall be increased by 4 years.

Article 177

With respect to a person who plans to hold the position but fails to completely meet the conditions listed in Paragraph 1 of Article 171 , Article 172 and Articles 174 through 176, if the rural credit cooperative, the associate rural credit cooperative union of the county (city, district), the rural credit cooperative union of the county (city, district), the associate rural credit cooperative union of the prefecture (city), the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government), the rural cooperative bank or the rural commercial bank considers that he has the necessary knowledge, experiences and capacities for the position to be held, it may submit an application on the case-by-case basis.

Section 2 Procedures for Licensing the Qualifications for Holding Positions

Article 178

The application of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the qualifications for holding the position of council member or senior manager shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal.

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of a banking regulatory branch office for the qualification for holding the position of sub-branch president shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal.

Article 179

The application of an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of a banking regulatory branch office for the qualification for holding the position of council member or senior manager shall be submitted by the legal person institution, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of acceptance of the entire application materials, make a written decision on ratification or refusal.

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of a banking regulatory branch office for the qualification for holding the position of director or senior manager shall be submitted by the legal person institution, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of acceptance of the entire application materials, make a written decision on ratification or refusal, and send a copy to CBRC for archival filing.

Article 180

The application of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the city where the banking regulatory office is located for the qualification for holding the position of council member or senior manager shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal.

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the qualification for holding the position of director or senior manager shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal, and make a copy to CBRC for archival filing.

The application of a rural cooperative bank or rural commercial bank within the jurisdiction of the city where the banking regulatory office is located for the qualification for holding the position of sub-branch president shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal.

The application of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) for the qualification for holding the position of representative office director general or vice director general shall be submitted by the legal person institution, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 30 days as of the acceptance, make a written decision on ratification or refusal.

Article 181

The application of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) for the qualification for holding the position of council member or senior manager shall be submitted by the legal person institution, be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 30 days as of acceptance of the entire application materials, make a written decision on ratification or refusal.

Article 182

When a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a rural cooperative bank, or a rural commercial bank, a branch thereof is newly established, the application for the qualification for holding the position of council member (director) or senior manager shall be handled together with that of the institution for the initiation of business.

When a rural cooperative bank or a rural commercial bank applies for initiating the business, the responsibility to check the qualifications for holding the positions of its directors, chairman of the board, vice chairman of the board, president and vice president shall remain with CBRC, and the responsibility to check the qualifications for holding the positions of business department general manager (director general), secretary of board of directors, general manager of the financial and internal audit departments, and sub-branch president, shall remain with the banking regulatory office.

Article 183

For the council members (directors) and senior managers who need to be checked on a case-by-case basis, the applications shall still be checked within the abovementioned scope of power, and copies shall be made to the administrative organ at the next higher level for archival filing.

For the council members (directors) and senior managers of cooperative financial institutions at the county level or below of the city where the banking regulatory office is located, who need to be checked on a case-by-case basis, no copy of the applications need to be made to CBRC for archival filing.

Article 184

CBRC or any of its dispatched offices may organize a special examination of the council president, vice council president, chairman of the board, vice chairman of the board and senior managers who intend to hold their respective positions and need to be subject to case-by-case check.

Article 185

The deciding organ or the deciding organ council shall authorize an acceptance organ to, either during the examination or in advance, make interviews, observations and examinations on the qualifications for holding positions of president, vice council president, chairman of the board, vice chairman of the board and senior managers.

Article 186

Where a person planning to hold the position is holding or has ever held the position of a financial institution's council president, vice council president, board chairman, vice board chairman, or senior manager, the applicant shall, when submitting the application materials for the qualification for holding the position, submit an audit report on his leaving the position, in addition.

Article 187

Where a person planning to hold the position is transferred to another parallel or lower position of the same nature in the same legal person institution, no new application for the qualification for holding the position needs to be filed. The institution shall, before the person holds the position, submit an audit report on his leaving the position or an economic liability audit report and the relevant materials on holding the position to the regulatory institution at the locality where the position is to be held, and the regulatory institution at the locality where the position is to be held shall solicit regulatory appraisal opinions from the regulatory institution at the locality where the position was held in the past.

In case any of the following circumstances arises, the regulatory institution at the locality where the position is to be held shall, in written form, notify the person planning to hold the position and the cooperative financial institution for which he works to apply anew for the qualification for holding the position:

(1)

Before the person holds the position, the audit report on his leaving the position or the economic liability audit report or the relevant materials on holding the position has not been submitted;

(2)

The conclusion of the audit report on his leaving the position or of the economic liability audit report is not true, or such a report shows that the person planning to hold the position might be in a circumstance under which he is not suitable to hold the new position;

(3)

The regulatory appraisal opinions of the regulatory institution at the locality where the position was held in the past show that the person planning to hold the position might be in a circumstance under which he fails to meet qualification conditions in the present measures for holding positions; or

(4)

His holding the position has been discontinued for 1 year or more.

Article 188

Where a council member (director) or any other senior manager is re-elected or re-employed at expiry of his term of office, his qualification for holding the position shall be subject to check anew.

Article 189

Where a deputy position holder presides the work for more than 3 months, he shall apply for administrative license pursuant to the conditions and procedures for the qualifications for holding chief positions.

Chapter VIII Supplementary Provisions

Article 190

For the licensing matters on modification of institutions, a cooperative financial institution shall complete the modification within 6 months as of the day when the administrative license decision is made, and report to the deciding organ and the local dispatched office of CBRC; as for the licensing matters on the qualifications for holding positions of council members (directors) and senior managers, the person planning to hold the position shall be on his position within 3 months as of the day when the administrative license decision is made, and report to the deciding organ and the local dispatched office of CBRC, unless there is otherwise different provisions in any law or administrative regulation.

If the abovementioned institution fails to complete the modification or the abovementioned person fails to be on his position within the time limit prescribed in the preceding paragraph, the administrative license decision shall be invalidated, and the deciding organ shall nullify the license.

Article 191

Where the establishment, modification or termination of a cooperative financial institution involves the legal procedures concerning registration or modification in respect of industrial and commercial administration or taxation, the party concerned shall, within 1 month after completing relevant modification procedures, report to the deciding organ and the local dispatched office of CBRC.

Article 192

Where a cooperative financial institution is changed through institutional reform into a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank, the name of its branch may be changed once for all.

Article 193

Where a rural credit cooperative plans to add any new kind or variety of business, the associate rural credit cooperative union of the county (city, district) shall act as the applicant.

Article 194

The words "more than" as mentioned in the present measures shall include the number subsequent to the word used.

Article 195

The power and responsibility to interpret the present measures shall remain with CBRC.

Article 196

The present measures shall come into force on February 1, 2006. In case any relevant provisions promulgated before the present measures come into force are inconsistent with the present measures, the present measures shall prevail.