Laws of the People's Republic of China

China Banking Regulatory Commission

Decree of China Banking Regulatory Commission

No. 2

The Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters on Chinese investment Commercial Banks adopted at the 40th chairmen's meeting of China Banking Regulatory Commission on November 10, 2005, are hereby promulgated and shall enter into effect as of the day of February 1, 2006.

Chairman, Liu Mingkang

January 12, 2006

Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters on Chinese investment Commercial Banks

Chapter I General Provisions

Article 1

In order to regulate the acts of China Banking Regulatory Commission (hereinafter referred to as the CBRC) and their dispatched offices in implementing the administrative licensing on Chinese investment commercial banks, make clear the administrative licensing matters, conditions, operational flows and terms, and protect the legitimate rights and interests of the applicants, according to the Banking Supervision Law of the People's Republic of China, the Administrative License Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks and other laws, administrative regulations and the relevant decisions of the State Council, these Measures are formulated.

Article 2

The "Chinese investment commercial banks" mentioned in these Measures shall include the state-owned commercial banks, joint-equity commercial banks, city commercial banks and urban credit cooperatives joint-equity limited companies, etc.

Article 3

In accordance with the Measures and the Provisions of China Banking Regulatory Commission on the Procedures for the Implementation of Administrative Licensing, the CBRC and its dispatched offices shall bring into effect the administrative licenses to Chinese investment commercial banks .

Article 4

The following matters about Chinese investment commercial banks shall be under the control of the administrative licensing of the CBRC or its dispatched office: the establishment, modification or termination of the institution, the adjustment of the business range, the addition of new varieties of business, and the qualifications for holding the positions of directors and senior managers, etc.

Article 5

The applicant shall submit the application documents in the light of the Catalogue and Requirements for the Formats of the Application Documents for the Administrative Licensing Matters of China Banking Regulatory Commission.

Chapter II Establishment of Institutions

Section I Establishment of Legal Person Institutions of Joint -equity Commercial Banks

Article 6

For the establishment of a legal person institution of a joint -equity commercial bank, an applicant shall meet the conditions as follows:

(1)

Its articles of association shall accord with the Company Law of the People's Republic of China (hereinafter referred to as the Company Law) and the Law of the People's Republic of China on Commercial Banks (hereinafter refers to as the Law on Commercial Banks);

(2)

Registered capital shall be paid-in registered capital and no less than one billion Yuan or equivalent convertible currency;

(3)

Directors and senior managers who meet the qualification conditions for holding their respective positions are needed as well as qualified operational personnel familiar with the banking business;

(4)

Right organizational institutions and management systems; and

(5)

A business place, safety protection measures and other relevant facilities suitable for its business operations.

Article 7

For the establishment of a legal person institution of a joint -equity commercial bank, the applicant shall at least meet the following prudent conditions in addition:

(1)

A good corporate governance structure;

(2)

A right risk management system, and effectively controlling the risks in associated transactions;

(3)

The local people's government shall not become a shareholder, and not intervene in its daily business operations;

(4)

The qualified foreign institutional investors shall be included in the promoters and shareholders;

(5)

Having a scientific and effective human resources management system as well as professional talents with high qualities;

(6)

Having an effective capital restraint and supplement mechanism; and

(7)

Redounding to dissolve the risks of existing financial institutions and promoting financial stability.

Article 8

As the establishment of a joint -equity commercial bank, eligible promoters shall include such as domestic financial institutions, overseas financial institutions, domestic non-financial institutions and other promoters recognized by the CBRC.

The "overseas financial institutions" mentioned in the preceding Paragraph shall involve the financial institutions in Hong Kong, Macao and Taiwan.

Article 9

As a promoter of the legal person institution of a joint -equity commercial bank, a domestic financial institution shall meet the conditions as follows:

(1)

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

(2)

The balance of its equity investments shall not exceed 50% of its net assets in general ( requirements of combined accounting statements);

(3)

Keeping a favorable balance in the latest 3 accounting years;

(4)

Having a good corporate governance structure, as well as a right and effective internal control system;

(5)

Its main prudent regulatory indices shall meet the regulatory requirements; and

(6)

Other prudent conditions prescribed by the CBRC.

Article 10

As a promoter or strategic investor of the legal person institution of a joint -equity commercial bank, an overseas financial institution shall meet the conditions as follows:

(1)

In the latest year, its total year-end assets shall be no less than 10 billion US Dollars in general;

(2)

In the latest 2 years, it shall have been appraised as good for its long-term credit by an international rating institution recognized by the CBRC;

(3)

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 industry at the place of its registration and shall not be lower than 8%; or the total amount of capital of a non-bank financial institution shall not be lower than 10% of the total amount of risk-weighted assets is;

(5)

Having a right internal control system;

(6)

The place of its registration shall have a right supervision and management system for the financial institution;

(7)

The country (region), which it is in, shall be in a good economic situation; and

(8)

Other prudent conditions prescribed by the CBRC.

As a promoter or strategic investor of the legal person institution of a joint -equity commercial bank, the overseas financial institution shall follow the principles of holding shares on the long-term basis, optimizing governance, business cooperation, and competition withdrawal.

In light of the risk situation of the financial industry and the requirements for the supervision thereof, the CBRC may adjust the conditions for overseas financial institutions as the promoters prescribed in the preceding Paragraph.

Article 11

The proportion of the shares of a single overseas financial institution as the promoter or strategic investor when investing to a single Chinese investment commercial bank shall not be more than 20%, and the proportion of the total shares of several overseas financial institutions as the promoters or strategic investors shall not be more than 25%.

The "proportion of the shares" mentioned in the preceding Paragraph refers to the proportion of the shares held by overseas financial institutions in the total amount of shares of a Chinese investment commercial bank. The proportion of the shares held by the associated parties to overseas financial institutions shall be computed together with the overseas financial institutions.

Article 12

As a promoter of the legal person institution of a joint -equity commercial bank, a domestic non-financial institution shall meet the conditions as follows:

(1)

Having registered at the administrative department for industry and commerce, and owning the legal person qualification;

(2)

Having a good corporate governance structure or an effective organizational management model;

(3)

Having a good social reputation as well as good credit and tax payment records, and repaying the principal and interests of the loans it owes to the financial institutions on time and in full amount;

(4)

Having a longer period of development and a steady business operational situation;

(5)

Having a stronger management capacity as well as good capital strength;

(6)

Having a good financial situation and having been in a favorable balance in the latest 3 accounting years;

(7)

After the year-end distribution, having the net assets that account for 30% of its total assets (requirements of combined accounting statements);

(8)

The balance of equity investments shall not be more than 50% of the net assets of the enterprise in general (requirements of combined accounting statements) except for the investment companies or holding companies prescribed by the State Council;

(9)

Capital sources for buying shares are true and lawful; and

(10)

Other prudent conditions prescribed by the CBRC.

Article 13

An enterprise shall not be a promoter of the legal person institution of a joint -equity commercial bank in any of the circumstances as follows:

(1)

Having obvious defects in the corporate governance structure or mechanism;

(2)

Having a large number of associated enterprises, complex and obscure in equity relationships, or frequent and abnormal in associated exchanges;

(3)

Not having a prominent major business, and covering too many industries in its business scope;

(4)

The flow fluctuation of cash is largely influenced by the economic situation;

(5)

The ratio of liabilities or the ratio of financial leverage is higher than the average industry ratio ; and

(6)

Other circumstances that will create significant disadvantage effects to the bank.

Article 14

The establishment of the legal person institution of a joint -equity commercial bank shall include two phases, namely, preparatory establishment and beginning of business.

Article 15

An application for the preparatory establishment of the legal person institution of a joint -equity commercial bank shall jointly be submitted to the CBRC by all the promoters for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 4 months upon acceptance of the application.

Article 16

The period of preparatory establishment of the legal person institution of a joint -equity commercial bank shall be 6 months as of the day of the approval decision made. If the preparatory establishment has not been carried out on time, the institution shall submit an application for postponing the preparatory establishment to the CBRC within 1 month prior to the expiry of the time limit for preparatory establishment. The CBRC shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application. And the longest period postponed for preparatory establishment shall be 3 months.

Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution shall submit an application for the beginning of business. If it fails to submit the application within the time limit, the approval document for preparatory establishment shall be abated and the decision-making organ shall logout the license for preparatory establishment.

Article 17

An application of the legal person institution of a joint -equity commercial bank for the beginning of business shall be submitted to the CBRC for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 20 days after acceptance of the application,.

Article 18

After receiving the ratification documents for the beginning of business and obtaining a financial business permit, the legal person institution of a joint -equity commercial bank shall register at the administrative department for industry and commerce and obtain a business license.

The legal person institution of a joint -equity commercial bank shall open up its business within 6 months after obtaining the business license. If it fails to initiate its business within the time limit, the institution shall submit an application for postponing the beginning of business within 1 month before the expiry of the time limit for the beginning of business, to the CBRC. The CBRC shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.

If the legal person institution of a joint -equity commercial bank fails to open up its business within the time limit prescribed in the preceding Paragraph, the ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business, take back the financial business permit, and make an announcement.

Section II Establishment of Legal Person Institutions of City Commercial Banks

Article 19

The city commercial bank shall be established in a city at or above the prefecture level and meet the conditions as follows:

(1)

Having the articles of association in the light of the Company Law and the Law on Commercial Banks;

(2)

The registered capital shall be no less than 1000 million Yuan and have been paid in, its capital adequacy ratio shall not be lower than 8%, and its core capital adequacy ratio shall not be lower than 4%;

(3)

The proportion of its badly performing loans shall be no higher than 10%;

(4)

Having senior managers who meet the qualification for holding the positions as well as qualified operational personnel familiar with the banking business;

(5)

Having a right and effective corporate governance structure and internal control system; and

(6)

The business place, safety protection measures and other relevant facilities suitable for its business operations.

Article 20

An application for establishing the legal person institution of a city commercial bank shall be filed by an urban credit cooperatives joint--equity limited company after combination and reorganization, and it shall meet the conditions as follows:

(1)

The capital adequacy ratio shall not be lower than 6%, and the core capital adequacy ratio shall not be lower than 3%;

(2)

The proportion of its badly performing loans shall be no higher than 15%, and the total amount of its assets shall be no less than 1.5 billion Yuan;

(3)

Having a good corporate governance structure;

(4)

Having right and effective risk management and internal control systems, and having no serious cases occurred in the latest two years;

(5)

Having a good financial situation and strong profit-making ability. The shareholders' equities of the former urban credit cooperative shall be first written off due to its accumulated losses, and the insufficient part shall be complemented by the former shareholders or the local government in cash. Its per capita assets shall be no less than 6 million Yuan (or 5 million Yuan for an undeveloped area). The rate of its year-end asset expenses in the latest year before the application is submitted shall be lower than 1.35% in general, and the rate of its asset profits shall not be lower than 0.2% in general, and the rate of its capital profits shall not be higher than 8% (the premise for the calculation of profits shall be the sufficient reserves for the losses incurred from all kinds of loans in that year), and the rate of interests reclaim shall not be lower than 80%;

(6)

Its liquidity ratio, ration of deposits and loans, ration of provisions and other indices shall meet the relevant supervisory requirements; and

(7)

Having withdrawn sufficient reserves for losses.

Article 21

Establishing a city commercial bank; there shall be eligible promoters that may include: domestic financial institutions, domestic non-financial institutions, overseas financial institutions and other promoters as recognized by the CBRC. A promoter shall follow the conditions prescribed in Articles 9 through 13 of these Measures.

Article 22

The establishment of the juridical person institution of a city commercial bank shall include two stages, namely, preparatory establishment and beginning of the business.

Article 23

An application for the preparatory establishment of the legal person institution of a city commercial bank shall be followed with the acceptance and preliminary examination of the banking regulatory bureau at the locality where the commercial bank is to be established, and the examination and decision shall be made by the CBRC. The CBRC shall make a written decision on approval or disapproval within 4 months upon receipt of the entire application documents.

Article 24

The period of preparatory establishment of the legal person institution of a city commercial bank shall be 6 months as of the day when the decision on approval is made. If the preparatory establishment has not been implemented on time, within 1 month prior to the expiry of the time limit for preparatory establishment, an application for postponing the preparatory establishment shall be submitted by the institution to the banking regulatory bureau. The banking regulatory bureau shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for preparatory establishment shall be 3 months.

Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution shall submit an application for the opening of business. If the application fails to be submitted within the time limit, the approval documents for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.

Article 25

An application of the legal person institution of a joint -equity commercial bank for the beginning of its business shall be submitted to the local banking regulatory bureau for acceptance, examination and decision. The banking regulatory bureau shall make a written decision on approval or disapproval within 2 months after acceptance of the application, and send a copy to the CBRC.

Article 26

After receiving the ratification document for the beginning of business and obtaining a financial business permit, the legal person institution of a city commercial bank shall register at the administrative department for industry and commerce and obtain a business license.

The legal person institution of a city commercial bank shall open up its business within 6 months after obtaining the business license. If the institution fails to open up its business within the time limit, it shall submit an application for postponing the beginning of business to the CBRC within 1 month prior to the expiry of the time limit for the beginning of business. The CBRC shall make a decision on whether to approve the postponement or not within 20 days as of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.

If the legal person institution of a city commercial bank fails to open up its business within the time limit prescribed in the preceding Paragraph, the ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business, take back the financial business permit and make an announcement.

Section III Establishment of Urban Credit Cooperatives Joint--equity Limited Companies

Article 27

The "establishment of an urban credit cooperatives joint--equity limited company" means that, on the basis of willingness and in the light of the Company Law, an enterprise legal person which is established upon reorganization and merge of several or one city credit cooperative(s) within a same city , absorbs public savings, grants loans and handles settlement businesses. This enterprise legal person shall be a local banking financial institution in the form of joint--equity limited company.

Article 28

For the establishment of an urban credit cooperative joint--equity limited company, the applicant shall meet the conditions as follows:

(1)

Having the articles of association in the light of the Company Law and the Law on Commercial Banks;

(2)

The registered capital shall be no less than 50 million Yuan, which has been paid in, its capital adequacy ratio shall not be lower than 8%, and its core capital adequacy ratio shall not be lower than 4%;

(3)

The proportion of its badly performing loans shall be no higher than 15%;

(4)

Having senior managers who own the qualification for holding their respective positions as well as qualified operational personnel familiar with the banking business;

(5)

Having right organizational institutions and management systems; and

(6)

Having business place, safety protection measures and other relevant facilities suitable for its business operations; and

(7)

Other prudent conditions prescribed by the CBRC.

Article 29

All the urban credit cooperatives that participate in the establishment of an urban credit cooperatives joint--equity limited company shall be subject to the consolidated calculation of financial statements, and shall meet the conditions as follows:

(1)

The capital adequacy ratio shall not be lower than 6%, and the core capital adequacy ratio shall not be lower than 3%;

(2)

The quality situation of asset shall be good, and the proportion of badly performing loans shall be no higher than 18%;

(3)

The situation of profit-making shall be good. The per capita assets shall not be lower than 5 million Yuan. The rate of year-end asset profits for the latest year before the application is submitted shall not be lower than 0.2% in general, the rate of capital profits shall not be lower than 4% in general, and the rate of interests recovery not higher than 80%; and

(4)

Having a good liquidity situation. And the liquidity ratio, ration of deposits and loans, ration of provisions and other indices shall meet the relevant supervisory requirements.

Each urban credit cooperative shall also meet other prudent conditions prescribed by the CBRC.

Article 30

The shareholders of the urban credit cooperative that has participated in the establishment of an urban credit cooperatives joint--equity limited company may be as the promoters of the urban credit cooperatives joint--equity limited company.

For the establishment of an urban credit cooperative joint--equity limited company, the promoters may also be the domestic financial institutions, domestic non-financial institutions, overseas financial institutions and other promoters recognized by the CBRC. The aforesaid promoters shall meet the conditions prescribed in Articles 9 through 13 of these Measures, but the total year-end assets of an overseas financial institution for the latest year shall not be less than one billion US Dollars in general.

Article 31

The establishment of an urban credit cooperatives joint--equity limited company shall include two stages, namely, preparatory establishment and beginning of the business.

Article 32

An application for the preparatory establishment of an urban credit cooperatives joint--equity limited company shall be subject to the acceptance and preliminary examination of the local banking regulatory bureau, and the examination and decision shall be made by the CBRC. The banking regulatory bureau shall seek for the supervisory opinions of the banking regulatory sub-bureau at the locality where the urban credit cooperatives joint--equity limited company is to be established. The CBRC shall make a written decision on approval or disapproval within 4 months after receipt of the entire application documents.

Article 33

The period of preparatory establishment of an urban credit cooperative joint--equity limited company shall be 6 months as of the day when the decision on approval is made. If the preparatory establishment has not been implemented on time, the institution shall submit an application for postponing the preparatory establishment to the banking regulatory bureau within 1 month prior to the expiry of the time limit for preparatory establishment. The banking regulatory bureau shall make a decision on whether to approve or disapprove within 20 days as of receipt of the written application, and the longest period postponed for preparatory establishment shall be 3 months.

Before the expiry of the time limit prescribed in the preceding Paragraph, the preparatory establishment group of the institution shall submit an application for the beginning of business. If an application fails to be submitted within the time limit, the approval document for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.

Article 34

An application of an urban credit cooperatives joint--equity limited company for the beginning of its business shall be submitted to the local banking regulatory bureau for acceptance and decision. The banking regulatory bureau shall make a written decision on approval or disapproval within 2 months upon acceptance of the application, and send a copy to the local banking regulatory sub-bureau.

Article 35

After receiving the ratification documents for the beginning of business and obtaining a financial business permit, an urban credit cooperatives joint--equity limited company shall register at the administrative department for industry and commerce and obtain a business license.

Within 6 months after obtaining the business license, the urban credit cooperatives joint--equity limited company shall open up its business. If the institution fails to open up its business within the time limit, the applicant shall submit an application for postponing the beginning of business to the banking regulatory bureau within 1 month prior to the expiry of the time limit for the beginning of business. The banking regulatory bureau shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.

If the urban credit cooperatives joint--equity limited company fails to open up its business within the time limit as prescribed in the preceding Paragraph, the original ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business, take back the financial business permit and make an announcement.

Section IV Establishment of Domestic Branches

Article 36

The domestic branches established by Chinese investment commercial banks shall include the branches, branch-level exclusive institutions, sub-branches and facilities of self-service banks, etc.

Article 37

If a state-owned commercial bank or joint -equity commercial bank applies for establishing a branch, the applicant shall meet the conditions as follows:

(1)

Having a good corporate governance structure;

(2)

Having sound and effective risk management and internal control systems;

(3)

Having an effective information management system;

(4)

Its capital adequacy ratio, ration of badly performing loans, profit-making ability and other important supervisory indices shall meet the supervisory requirements;

(5)

Having the ability to apportion the working capital: the apportioned working capital shall be no less than 100 million Yuan or equivalent convertible currency, and the total amount of the working capital apportioned to all the branches shall not exceed 60% of the net capital of the applicant;

(6)

Having committed no serious cases or no serious illegal or rule-breaking acts within the latest 2 years;

(7)

Having a good risk rating conclusion; and

(8)

Other prudent conditions prescribed by the CBRC.

Article 38

If a state-owned commercial bank or joint -equity commercial bank applies for establishing bankcard centers, instruments centers, capital operating centers or other branch-level exclusive institutions, the applicant shall meet the conditions as follows:

(1)

The management system reform for exclusive business operations shall accord with the development trends of these business operations;

(2)

The management system reform for exclusive business operations shall accord with the overall strategies and development plans of the general office, and shall benefit the enhancement of the whole competitiveness;

(3)

Having good corporate governance, its internal control shall be sound and effective, and its main prudent supervision indices accord with the supervisory requirements of the CBRC;

(4)

Its exclusive business operations shall have been opened up for more than two years, have a certain scale and have accumulated certain experiences;

(5)

The quality of its assets for exclusive business operations, the profit-making ability and other indices shall be in a good situation;

(6)

Having a safe and perfect business processing system or technical supporting system;

(7)

Having sound and effective internal control, risk management and accountability systems;

(8)

Having the ability to apportion the working capital; and

(9)

Other prudent conditions prescribed by the CBRC.

Article 39

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

Article 40

An application for the preparatory establishment of a branch of a state-owned commercial bank or joint -equity commercial bank shall be submitted by its general office with the banking regulatory bureau at the locality where the branch is to be established for acceptance and preliminarily examination, and the examination and decision shall be made by the CBRC. The CBRC shall make a written decision on approval or disapproval within 4 months after receipt of the entire application documents.

An application for the preparatory establishment of a branch-level exclusive institution shall be submitted by the general office to the CBRC for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 4 months after receipt of the entire application documents.

Article 41

The period of preparatory establishment of a branch or branch-level exclusive institution shall be 6 months as of the day when the approval decision is made. If the preparatory establishment has not been implemented on time, within 1 month prior to the expiry of the time limit for preparatory establishment, the general office thereof shall submit an application for postponing the preparatory establishment to the organ that accepts the application for preparatory establishment. The organ that accepts the application for preparatory establishment shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for preparatory establishment shall be 3 months.

Before the expiry of the time limit prescribed in the preceding Paragraph, the applicant shall submit an application for the beginning of business. If the application fails to be submitted within the time limit, the approval document for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.

Article 42

An application of a branch for the beginning of its business shall be submitted to the banking regulatory bureau at the locality where the branch is to be established for acceptance, examination and decision. The banking regulatory bureau shall make a written decision on approval or disapproval within 2 months after acceptance of the application, and send a copy to the CBRC.

An application of a branch-level exclusive institution for the beginning of its business shall be submitted to the CBRC for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 2 months upon receipt of the application documents.

A branch or branch-level exclusive institution shall meet the conditions as follows for the beginning of its business:

(1)

Having actual and sufficient working capital;

(2)

Having senior managers who owned the qualification for holding their respective positions as well as qualified operational personnel familiar with the banking business;

(3)

Having business place, safety protection measures and other relevant facilities suitable for its business operations; and

(4)

Having organizational institutions, rules and bylaws suitable for the development of its business.

Article 43

After receiving the ratification document for the beginning of business and obtaining a financial business permit, a branch or branch-level exclusive institution shall register at the administrative department for industry and commerce and obtain a business license.

Within 6 months after obtaining the business license, the branch or branch-level exclusive institution shall open up its business. If the institution fails to open up its business within the time limit, the applicant shall submit an application for postponing the beginning of business to the organ that accepts the application for the beginning of business within 1 month prior to the expiry of the time limit for the beginning of business. The organ that accepts the application for the beginning of business shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.

If the branch or branch-level exclusive institution fails to open up its business within the time limit as prescribed in the preceding Paragraph, the original ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business, take back the financial business permit and make an announcement.

Article 44

To establish a branch, a Chinese investment commercial bank shall meet the conditions as follows:

(1)

Having established the branch, the institution that is considered as the management of the branch, or the institution above the branch level in the same city at or above the prefecture level where the branch is to be established, and the aforesaid branch or institution shall have been formally operated for more than one year and have a good asset quality;

(2)

The established institution at the locality where the branch is to be established shall have a stronger internal control capacity, and have no serious illegal or rule breaking conducts or cases occurred within the latest year due to its confused internal management;

(3)

Having the ability to apportion the working capital: the working capital apportioned by the next higher competent bank shall be no less than 10 million Yuan or equivalent convertible currency, and the total amount of the working capital apportioned to the branches shall not exceed 60% of the net capital or working capital of the bank that apportions the working capital;

(4)

Having established a system or mechanism for assessment, supervision, authorization and adjustment of senior managers, and also having sufficient professional management talents; and

(5)

Other prudent conditions prescribed by the CBRC.

Article 45

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

Article 46

A Chinese investment commercial bank can only apply for establishing one sub-branch in one city at one time. The applicant may not submit another application before obtaining a reply on disapproval of preparatory establishment or approval of beginning of business for the former application.

Article 47

An application for the preparatory establishment of a sub-branch of a Chinese investment commercial bank shall be submitted by a branch or an institution that is regarded as the branch to the local banking regulatory sub-bureau or the banking regulatory bureau of the local city for acceptance, and conform to the examination and decision of the banking regulatory bureau. The banking regulatory bureau shall make a written decision on approval or disapproval within 4 months after receipt of the entire application documents or the application.

Article 48

The period of preparatory establishment of a sub-branch shall be 6 months as of the day when the decision on approval is made. If the preparatory establishment has not been implemented on time, the applicant shall submit an application for postponing the preparatory establishment to the organ that accepts the application for preparatory establishment within 1 month prior to the expiry of the time limit for preparatory establishment. The organ that accepts the application for preparatory establishment shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for preparatory establishment shall be 3 months.

Before the expiry of the time limit prescribed in the preceding Paragraph, the sub-branch of a Chinese investment commercial bank shall submit an application for the beginning of business. If the application fails to be submitted within the time limit, the approval document for preparatory establishment shall be abated, and the decision-making organ shall logout the license for preparatory establishment.

Article 49

An application of a sub-branch for the beginning of its business shall be submitted to the organ that accepts the application for preparatory establishment for acceptance, examination and decision. The organ that accepts the application for preparatory establishment shall make a written decision on approval or disapproval within 2 months after receipt of the application.

A sub-branch shall meet the conditions as follows for the beginning of its business:

(1)

Having actual and sufficient working capital;

(2)

Having senior managers who own the qualification for holding their respective positions as well as qualified operational personnel familiar with the banking business; and

(3)

Having business place, safety protection measures and other relevant facilities suitable for its business operations.

Article 50

After receiving the ratification document for the beginning of business and obtaining a financial business permit, a sub-branch shall register at the administrative department for industry and commerce and obtain a business license.

The sub-branch shall open up its business within 6 months after obtaining the business license. If the institution fails to open up its business within the time limit, the applicant shall, submit an application for postponing the beginning of business to the organ that accepts the application for the beginning of business within 1 month before the expiry of the time limit for the beginning of business. The organ that accepts the application for the beginning of business shall make a decision on whether to approve the postponement or not within 20 days as of the day of receipt of the written application, and the longest period postponed for the beginning of business shall be 3 months.

If the office fails to open up its business within the time limit as prescribed in the preceding Paragraph, the original ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business, take back the financial business permit, and make an announcement.

Article 51

The term "self-service bank" means the unmanned business establishment of a commercial bank, which is established out of the existing business places but in another independent business place and provides financial services such as currency deposit and withdrawal, 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-service bank, a commercial bank shall meet the conditions as follows:

(1)

Having established a branch, the institution that is considered as the branch or the institution above the sub-branch level at the locality where the self-service bank is to be established, and its asset quality shall be good;

(2)

The institution established at the locality where the self-service bank is to be established shall have a strong internal control capability, and have no serious illegal or rule-breaking conduct or serious cases due to poor internal management in the latest 1 year;

(3)

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

(4)

Other prudent conditions prescribed by CBRC.

Article 52

A Chinese investment commercial bank can only apply for establishing no more than three self-service banks in one city at one time. The applicant shall not submit another application before obtaining a reply on disapproval or approval of establishment for the former application.

Article 53

An application of a Chinese investment commercial bank for the establishment of a self-service bank shall be submitted to the local banking regulatory sub-bureau or the banking regulatory bureau of the local city for acceptance, and the examination and decision shall be made by the banking regulatory bureau. The banking regulatory bureau shall make a written decision on approval or disapproval within 3 months as of the day of receipt of the entire application documents or the date of direct acceptance of the application.

Article 54

A self-service bank shall open up its business within 3 months after obtaining the approval. If it fails to open up its business within the time limit, the applicant shall submit an application for postponing the beginning of business to the original organ that accepts the application for the beginning of business within 1 month before the expiry of the time limit. The original organ that accepts the application for the beginning of business shall make a decision on whether to approve the postponement or not within 15 days as of the day of receipt of the application documents, and the longest period postponed for the beginning of business shall be 3 months.

If the self-service bank fails to open up its business within the time limit as prescribed in the preceding Paragraph, the original ratification documents for the beginning of business shall be abated, and the decision-making organ shall logout the license for the beginning of business.

After the self-service bank opens up its business, the commercial bank shall report the information on operation, internal management and facilities of the self-service bank to the supervisory department in time.

Article 55

To purchase other banking financial institution to establish branches, a Chinese investment commercial bank shall meet the conditions as follows:

(1)

The main supervision indices shall meet the supervisory requirements, and having the capacity to apportion the working capital after withdrawing enough reserves;

(2)

The branch authorized by the acquiring party for carrying out the task of acquisition shall have a good operational situation, a sound and effective internal control system and lawful and regular business operations;

(3)

It shall purchase the branch in accordance with the market situation and the principle of willingness;

(4)

In general, a joint -equity commercial bank can only establish branches within the jurisdiction of the cities at the prefecture level where the medium and small-sized financial institutions are to be acquired;

(5)

If the party to be purchased is a local trust and investment company, the capital quality is good and a relatively scale is small; and

(6)

Other prudent conditions prescribed by the CBRC.

Article 56

If a Chinese investment commercial bank acquires an urban credit cooperative, it shall specify in the contract concluded with the local government, that the capital for acquisition can only be used for paying off the debts of the purchased urban credit cooperative. At the same time, the government shall issue a letter of commitment to promise that it will be completely responsible for the work relating to the market exit of urban credit cooperatives, if its businesses have been stopped for rectification within the region at the locality of the purchased urban credit cooperative, the government will ensure that the purchased urban credit cooperative will completely exit the market and no problem will be left behind.

As to those urban credit cooperatives for which the local governments have borrowed money from the central treasury and the businesses have been suspended for rectification, and their risks have been controlled, they shall not be incorporated into the range of acquisition in general.

Article 57

To purchase a branch of another banking financial institution, a Chinese investment commercial bank shall go through two stages: purchase and beginning of business. The procedures for examining and approving the acquisition and the beginning of business shall be respectively similar with those for examining and approving the preparatory establishment and the beginning of business of the branch or office of a Chinese investment commercial bank.

A branch shall be established if a Chinese investment commercial bank has purchased the medium or small-sized financial institutions and established the institution in a city at or above the prefecture level.

Article 58

In accordance with the requirements for developing its business, an urban credit cooperatives joint--equity limited company may establish branches within the local city . The establishment of an urban credit cooperative shall include two stages, namely, preparatory establishment and beginning of business.

Article 59

An application for the preparatory establishment of a branch of an urban credit cooperatives joint--equity limited company shall be followed to the acceptance and preliminary examination of the local banking regulatory bureau and be reported to the CBRC for examination and approval. For the establishment of a branch of an urban credit cooperatives joint--equity limited company, the working capital suitable for its operational scale shall be apportioned in accordance with the provisions. The total amount of working capital to be apportioned shall not be more than 60% of its net capital. Other conditions and procedures for preparatory establishment and beginning of business shall be determined in the light of the relevant provisions on preparatory establishment and beginning of business of Chinese investment commercial banks.

Section V Establishment of Overseas Institutions

Article 60

If a Chinese investment commercial bank applies for the establishment, sharing or acquisition of an overseas institution, it shall meet the conditions as follows:

(1)

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

(2)

The balance of its equity investments shall not exceed 50% of its net assets in general (requirements of combined accounting statements);

(3)

Having been in a favorable balance in the latest 3 accounting years;

(4)

The balance of its year-end assets in the latest year shall be 100 million Yuan or more before the application;

(5)

Having lawful and sufficient sources of foreign exchange funds;

(6)

The corporate governance structure is good and a sound and effective internal control system;

(7)

The main prudent supervisory indices shall meet the supervisory requirements; and

(8)

Other prudent conditions prescribed by the CBRC.

The "overseas institutions of Chinese investment commercial banks" means the overseas branches, wholly affiliated or holding financial institutions and dispatched offices of Chinese investment commercial banks.

Article 61

An application of a state-owned commercial bank or joint -equity commercial bank for the establishment of an overseas institution shall be followed to the acceptance, examination and decision of the CBRC. The CBRC shall make a written decision on approval or disapproval within 6 months upon acceptance of the application, and send a copy thereof to the CBRC.

An application of a city commercial bank for the establishment of an overseas institution shall be followed to the acceptance and preliminary examination of the local banking regulatory bureau, and the examination and decision shall be made by the CBRC. The CBRC shall make a written decision on approval or disapproval within 6 months after receipt of the entire application documents.

Chapter III Modification of Institutions

Section I Modification of Legal Person Institutions

Article 62

The modification of a legal person institution shall include the modification of its name, -equity rights, registration capital, articles of association, domicile or organizational form, or the split-off, split-up, acquisition or merger, etc.

Article 63

The modification of the name of the legal person institution of a state-owned commercial bank or joint -equity commercial bank shall be accepted by the CBRC, which shall examine and make the decision. And the modification of the name of the legal person institution of a city commercial bank, urban credit cooperatives joint--equity limited company or urban credit cooperative shall be accepted by the local banking regulatory bureau, which shall examine and make the decision.

Article 64

Because of the modification of the equity structure of a Chinese investment commercial bank, the qualifications for its shareholders shall be the same as the qualifications for the promoters to buy shares of the legal person institution of a newly-established joint -equity commercial bank as prescribed in Articles 9 through 13. However, if an overseas financial institution invests in or buys shares of an urban credit cooperatives joint--equity limited company, its total year-end assets in the latest year shall be no less than one billion US Dollars in general.

An application of a state-owned city commercial bank or urban credit cooperatives joint--equity limited company for modifying the shareholders that hold 5% or more of its total amount of capital or shares, or an application of an overseas financial institution for making investments or buying shares shall be accepted by the CBRC, which shall examine and make the decision.

An application of a city commercial bank or urban credit cooperatives joint--equity limited company for modifying the shareholders who hold more than 5% but less than 10% of its total amount of capital or shares shall be accepted by the local banking regulatory bureau, which shall examine and make the decision. An application for modifying the equity structure whereby an enterprise outside the province where a city commercial bank or urban credit cooperatives joint--equity limited company is registered buys shares of the city commercial bank or urban credit cooperatives joint--equity limited company or an application of a city commercial bank or urban credit cooperatives joint--equity limited company for modifying the shareholders who hold 10% or more of its total amount of capital or shares shall be accepted by the banking regulatory bureau at the locality of the city commercial bank or urban credit cooperatives joint--equity limited company, and the CBRC shall examine and determine. An application of an overseas financial institution for investing in or buying shares of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted by the CBRC, which shall examine and make the decision.

If an investor buys shares of a Chinese investment commercial bank, it shall completely and faithfully disclose the associated relationship in accordance with the Measures for the Administration of Associated Transactions between Commercial Banks and their Insiders or Shareholders.

Article 65

If a Chinese investment commercial bank modifies its registered capital, the qualifications of its shareholders shall be the same with the conditions as prescribed in Articles 9 through 13. However, where the shareholder of an urban credit cooperatives joint--equity limited company is an overseas financial institution, its total year-end assets in the latest year shall be no less than one billion US Dollars in general.

The modification of the registered capital of a state-owned commercial bank or joint -equity commercial bank shall be accepted by the CBRC, which shall examine and make the decision. The modification of the registered capital of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted and examined by the local banking regulatory bureau for decision. The investment or sharing of an overseas financial institution shall be accepted and preliminary examined of the banking regulatory bureau, and the CBRC shall examine and make the decision.

Where a Chinese investment commercial bank modifies its registered capital by way of apportionment of shares or raise of new shares, before the registered capital is modified, the scheme on the apportionment of shares or the raise of new shares shall be followed to the examination and approval. The procedures for accepting, examining and deciding the examination and approval of the aforesaid scheme shall be the same with those as prescribed in the preceding Paragraph.

Article 66

A Chinese investment commercial bank shall meet the conditions as prescribed by the State Council and the CSRC for the overseas public share raising or listing. It shall submit an application to the CBRC and obtain the approval thereof before applying to the CSRC.

The overseas public share raising or listing by a state-owned commercial bank or joint -equity commercial bank shall be accepted by the CBRC, which shall examine and make the decision. The overseas public share raising or listing by a city commercial bank shall be accepted and preliminary examined by the banking regulatory bureau, and the CBRC shall examine and make the decision .

Article 67

The modification of the articles of association of a state-owned commercial bank or joint -equity commercial bank shall be accepted by the CBRC, which shall examine and make the decision. The modification of the articles of association of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted, examined and decided by the banking regulatory bureau.

Article 68

Where a Chinese investment commercial bank changes its business place, it shall have qualified business place, safety protection measures and other relevant facilities for its business.

The change of domicile of a state-owned commercial bank or joint -equity commercial bank shall be accepted, examined and decided by the CBRC. The change of domicile of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted, examined and decided of the banking regulatory bureau.

Article 69

If a Chinese investment commercial bank modifies its organizational form, or an urban credit cooperative is changed into an urban credit cooperatives joint--equity limited company, it shall meet the provisions in the Company Law, the Law on Commercial Banks and other laws, regulations and rules.

If a state-owned commercial bank is changed into a joint -equity commercial bank, it shall be complied with the conditions for establishing joint -equity commercial banks and the conditions for shareholders to make investments and buy shares. The state-owned commercial bank shall submit an application to the CBRC for acceptance, examination and decision.

The modification of the organizational form of a state-owned commercial bank or joint -equity commercial bank shall be accepted, examined and decided by the CBRC. The modification of the organizational form of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted and preliminary examined of the banking regulatory bureau, and be followed to the examination and decision of the CBRC.

The modification of an urban credit cooperative into an urban credit cooperatives joint--equity limited company shall be accepted and preliminary examined of the banking regulatory bureau, and be followed to the examination and decision of the CBRC.

Article 70

The division of a Chinese investment commercial bank shall meet the provisions in the Company Law, the Law on Commercial Banks and other laws, regulations and rules.

The division of a state-owned commercial bank or joint -equity commercial bank shall be accepted, examined and decided by the CBRC. The division of a city commercial bank or urban credit cooperatives joint--equity limited company shall be accepted and preliminary examined of the banking regulatory bureau, and be followed to the examination and decision of the CBRC.

In accordance with the conditions and procedures for modification, if split-off, the surviving party shall be followed to administrative licensing after the expiration of announcement period for split-up. The newly established party shall be in the light of administrative licensing pursuant to the conditions and procedures for the legal person institution to initiate its business.

After the expiry of the time limit for announcement of the split-up, if split-up, the newly established party shall be followed to the administrative licensing pursuant to the conditions and procedures for the legal person institution to initiate its business. The original legal person institution shall be in the light of the administrative licensing pursuant to the conditions and procedures for the legal person institution to dissolve its business.

Article 71

The combination of Chinese investment commercial banks shall be the same as the provisions in the Company Law, the Law on Commercial Banks and other laws, regulations and rules.

If any party to the combination is a state-owned commercial bank or joint -equity commercial bank, the combination shall be accepted, examined and decided by the CBRC. Any other kind of combination shall be accepted and preliminary examined of the banking regulatory bureau, and be followed to the examination and decision of the CBRC.

In accordance with the conditions and procedures for modification, if acquisition, the acquiring party shall accord with the administrative licensing after the expiry of the time limit for announcement of the acquisition. The party being acquired shall be followed to the administrative licensing pursuant to the conditions and procedures for the legal person institution to terminate its business.

After the expiry of the time limit for announcement of the merger, if merger, the newly established party shall accord with the administrative licensing pursuant to the conditions and procedures for the legal person institution to initiate its business. The original legal person institution shall be in the light of administrative licensing pursuant to the conditions and procedures for the legal person institution to dissolve its business.

Article 72

As to any altered matter as prescribed in this Section shall be followed to the acceptance of the supervisory organ at the lower level and be reported to the supervisory organ at the next higher level for decision, and within 3 months upon receipt of the entire application documents, the supervisory organ at the next higher level shall make a written decision on approval or disapproval. If any altered matter as prescribed in this Section is followed to the acceptance, examination and decision of the same supervisory organ, a written decision on approval or disapproval shall be made within 3 months upon receipt of the application.

Section II Modification of Domestic Branches

Article 73

The modification of a domestic branch of a Chinese investment commercial bank shall include the modification of the name of the branch, branch-level exclusive institution, sub-branch, office, savings house or self-service bank, or upgrading or degradation, change of business place and temporary closedown, etc.

Article 74

The modification of the name of a branch of any Chinese investment commercial bank in a city where a banking regulatory bureau is located shall be accepted, examined and decided by the banking regulatory bureau. The modification of the name of a branch of any Chinese investment commercial bank in a city where a banking regulatory sub-bureau is located shall be accepted, examined and decided by the banking regulatory sub-bureau.

Article 75

Where a sub-branch of a Chinese investment commercial bank is upgraded into a branch, it shall meet the conditions as follows:

(1)

The general office shall have right and effective internal control and risk management systems;

(2)

The general office shall have sufficiently and actually apportioned the working fund;

(3)

The sub-branch to be upgraded shall have made profits for 2 successive years;

(4)

A sound and effective internal control system shall have in the sub-branch to be upgraded, which have committed no serious cases or serious rule-breaking conduct in the latest 2 years;

(5)

Senior managers who have the qualification conditions for holding their respective positions are needed in the sub-branch to be upgraded as well as qualified operational personnel familiar with the banking business;

(6)

Having the business place, safety protection measures and other relevant facilities suitable for its business operations; and

(7)

Other prudent conditions prescribed by CBRC.

If a sub-branch is upgraded into a branch, an application shall be submitted by the general office of the commercial bank with the banking regulatory bureau at the locality of the upgraded branch for acceptance and preliminary examination, and be followed to the examination and decision of the CBRC.

Article 76

Where an institution under the level of sub-branch is upgraded into a branch, it shall meet the conditions as follows:

(1)

A good operational situation shall have in the institution to be upgraded ;

(2)

A sound and effective internal control system shall have in the institution to be upgraded, which has committed no serious cases or serious rule-breaking conduct in the latest 2 years;

(3)

Senior managers who meet the qualification conditions for holding their respective positions as well as qualified operational personnel familiar with the banking business are needed in the institution to be upgraded;

(4)

The business place, safety protection measures and other relevant facilities suitable for its business operations shall be owned by the institution to be upgraded; and

(5)

Other prudent conditions prescribed by CBRC.

An application for upgrading an institution under the level of sub-branch into a branch shall be submitted by the branch or general office of the commercial bank. An application for upgrading an institution under the level of sub-branch at the locality of a banking regulatory bureau into a branch shall be accepted, examined and decided by the banking regulatory bureau. An application for upgrading an institution under the level of sub-branch at the locality of a banking regulatory sub-bureau to a branch shall be accepted, examined and decided by the banking regulatory sub-bureau.

Article 77

An application for degrading a branch into a sub-branch shall be submitted by the general office of the commercial bank. An application for degrading shall be submitted to the banking regulatory bureau at the locality of the institution to be degraded, and be accepted, examined and decided by the banking regulatory bureau.

Article 78

It shall have qualified business place, safety protection measures and other relevant facilities suitable for its business operations, if a branch of a Chinese investment commercial bank changes its business place within the administrative region of a same city at or above the prefecture level.

Article 79

If a branch of a Chinese investment commercial bank changes its business place, the application shall be submitted by the competent organ of the institution to be modified at the locality of the city at or above the prefecture level, and be accepted, examined and decided of the local banking regulatory sub-bureau or the banking regulatory bureau of the local city.

A branch of a Chinese investment commercial bank shall continue its business or temporarily close down, or jointly operate with any other operational institution at the original place from the day when the application for the change of business place is approved to the day when it initiates its business at the new place, and shall make a choice when applying for the modification.

Article 80

As to any altered matter as prescribed in this Section that shall be accepted by the supervisory organ at a lower level and be reported to the supervisory organ at the next higher level for decision, the supervisory organ at the next higher level shall make an approval or disapproval within three months upon receipt of the entire application documents. If any altered matter as prescribed in this Section shall be accepted, examined and decided by the same supervisory organ, the supervisory organ shall make an approval or disapproval within three months upon receipt of the application.

Article 81

The continuous suspension of business of an institution of a Chinese investment commercial bank for 3 days to 6 months shall be closed down temporarily.

An application for temporary closedown shall be submitted by the branch of the institution to be temporarily closed down or a management institution at or above the branch level. The application for temporary closedown shall be accepted, examined and decided of the banking regulatory sub-bureau at the locality of the institution or the banking regulatory bureau in the local city, and a written decision on approval or disapproval shall be made by the banking regulatory sub-bureau or bureau within ten days upon acceptance of the application.

Where the time limit 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 within 5 days after the resumption of business, the original applicant shall report it to the organ, which makes the decision. If the business place is rebuilt, the original applicant shall resume its business after having provided the decision-making organ with the certificate on ownership or use right of the business place as well as the proof documents on safety and fire control. If the time limit of temporary closedown needs to be extended due to any particular circumstance, the aforesaid institution shall submit an application anew pursuant to the procedures in the preceding Paragraph.

Section III Modification of Overseas Institutions

Article 82

The upgrading, modification of working capital or registered capital, any significant matter on investments, alteration of equity structure, or division or combination of an overseas institution of a Chinese investment commercial bank or any other matter as prescribed by the CBRC shall be followed to the approval of the CBRC.

Article 83

An application of an overseas institution of any Chinese investment commercial bank for modifying any matter shall be submitted by its general office to the CBRC, and be accepted, examined and decided by the CBRC. And a written decision on approval or disapproval shall be made by the CBRC within three months as of acceptance of the application.

Chapter IV Termination of Institutions

Section I Termination of Legal Person Institutions

Article 84

Where a Chinese investment commercial bank is under any of the circumstances as follows, it shall apply for dissolution:

(1)

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

(2)

Its shareholders' meeting decides to dissolve it; or

(3)

It needs to be dissolved due to division or combination.

Article 85

The dissolution of a state-owned commercial bank or joint -equity commercial bank shall be accepted, examined and decided by the CBRC. And a written decision on approval or disapproval shall be made by the CBRC within three months as of the day of receipt of the entire application documents.

The dissolution of a city commercial bank shall be accepted and preliminary examined of the banking regulatory bureau, and be examined and decided by the CBRC. And a written decision on approval or disapproval shall be made by the CBRC within three months as of receipt of the entire application documents.

The dissolution of an urban credit cooperatives joint--equity limited company or urban credit cooperative shall be accepted and preliminary examined by the banking regulatory bureau, and be examined and decided by the CBRC. And a written decision on approval or disapproval shall be made by the CBRC within three months as of the day of receipt of the entire application documents.

Article 86

Where a Chinese investment commercial bank is dissolved due to division or combination, the dissolution shall be examined and approved along with the division or combination.

Article 87

If the legal person institution of a Chinese investment commercial bank or urban credit cooperative is under any of the circumstances as follows, before applying to the court for bankruptcy, it shall apply to the CBRC for approval:

(1)

If it is unable to pay the due debts, it shall apply for bankruptcy on the principle of willing or being required by its creditors; or

(2)

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

An application of a state-owned commercial bank or joint -equity commercial bank for bankruptcy shall be accepted, examined and decided by the CBRC, and a written decision on approval or disapproval shall be made by the CBRC within three months upon acceptance of the application.

An application of a city commercial bank, urban credit cooperatives joint--equity limited company or urban credit cooperative for bankruptcy shall be accepted and preliminary examined by the banking regulatory bureau, and the CBRC shall examine and make the decision. A written decision on approval or disapproval shall be made by the CBRC within three months upon receipt of the entire application documents.

Section II Terminations of Branches

Article 88

If a domestic or overseas branch of a Chinese investment commercial bank terminates its business (except for being revoked according to the law), it shall submit an application for termination.

Article 89

An application for terminating the business of a domestic branch of a Chinese investment commercial bank shall be accepted and preliminary examined by the banking regulatory bureau, and the CBRC examine and make the decision. A written decision on approval or disapproval shall be made by the CBRC within three months upon receipt of the entire application documents.

An application for terminating the business of a domestic sub-branch or an institution under the level of sub-branch (including the facilities of self-service banks) shall be accepted, examined and decided by the local banking regulatory sub-bureau or the banking regulatory bureau of the local city, and A written decision on approval or disapproval shall be made by the banking regulatory sub-bureau or bureau within three months upon acceptance of the application.

An application for terminating the business of an overseas institution of a Chinese investment commercial bank shall be accepted, examined and decided by the CBRC. And a written decision on approval or disapproval shall be made by the CBRC within three months upon acceptance of the application.

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

Section I Beginning of Foreign Exchange Business and Addition of Varieties of Foreign Exchange Business

Article 90

If a city commercial bank or urban credit cooperatives joint--equity limited company, which has been established but has not opened up its foreign exchange business yet, applies for the beginning of foreign exchange business except for settlement and sales of foreign exchange or the addition of varieties of foreign exchange business, it shall meet the conditions as follows:

(1)

It shall operate in accordance with the laws and regulations, a sound and effective internal control system and a good business situation are needed;

(2)

Its capital adequacy ratio shall not be lower than 8%, and its core capital adequacy ratio shall not be lower than 4%;

(3)

Having the corresponding working capital and qualified staff of foreign exchange business suitable for the foreign exchange business being declared;

(4)

Having the business place and relevant facilities suitable for the requirements for carrying out foreign exchange business; and

(5)

Other prudent conditions required by CBRC.

Article 91

An application of a city commercial bank or urban credit cooperatives joint--equity limited company for the beginning of foreign exchange business or the addition of varieties of foreign exchange business shall be accepted by the local banking regulatory sub-bureau or the banking regulatory bureau of the local city, and the banking regulatory bureau shall examine and make the decision . The banking regulatory bureau shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents or upon acceptance.

Section II Raise of Subordinated Fixed-term Debts and Issuance of Subordinated Bonds

Article 92

A commercial bank shall meet the conditions as follows for raising subordinated fixed-term debts or issuing subordinated bonds by private placement:

(1)

Having classified its loans into five levels, and the result of classification shall be authentic and accurate;

(2)

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

(3)

Adequate reserves for loan losses;

(4)

A good corporate governance structure; and

(5)

No source cases or illegal or law-breaking conduct in the latest 3 years.

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

Article 93

An application of a state-owned commercial bank or joint -equity commercial bank for raising subordinated fixed-term debts or issuing subordinated bonds shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for raising subordinated fixed-term debts or issuing subordinated bonds shall be accepted and preliminary examined of the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section III Beginning of Derivative Transaction Business

Article 94

A commercial bank that applies for the beginning of derivative transaction business shall meet the conditions as follows:

(1)

In a good business situation, its main risk supervisory indices shall meet the requirements;

(2)

A sound risk management system and internal control system for derivative transactions are needed;

(3)

A perfect business processing system for automatic connection of the front, middle and back offices of derivative transactions and a real-time risk management system are needed;

(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 without records on bad;

(5)

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

(6)

The qualified transaction place and equipment; and

(7)

Other prudent conditions prescribed by the CBRC.

Article 95

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of derivative transaction business shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of derivative transaction business shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section IV Beginning of Electronic Banking, Addition or Modification of Varieties of Electronic Banking

Article 96

The electronic banking opened up with Internet or other open network or wireless network, including online bank, mobile bank, and the electronic banking opened up with PDA, etc., shall be examined and approved.

Article 97

To apply for the beginning of electronic banking, the applicant shall meet the conditions as follows:

(1)

The business operations is under normal, a sound risk management system and a sound internal control system have been established, and its main information management system and business processing system shall meet with no serious events within one year before it applies for the beginning of electronic banking;

(2)

The overall development strategy and development planning for electronic banking and electronic banking safety strategy have been made, and the organizational system and institutional system for risk management of electronic banking have been established;

(3)

In accordance with the development planning and safety strategy for electronic banking, the basic facilities and system for the operation of electronic banking shall have been built up, and the necessary safety check and business testing on relevant facilities and systems have been made;

(4)

The safety evaluation on risk management of electronic banking and business operational facilities and system, etc., which meets the supervisory requirements, shall have been conducted;

(5)

A specific electronic banking management department shall have been set up, and qualified managers and technicians have been staffed with; and

(6)

Other prudent conditions required by the CBRC.

Article 98

To open up the electronic banking in the form of online banking business or mobile banking business, etc. by using Internet as the medium, the applicant shall meet the conditions as follows in addition to those mentioned in Article 97 :

(1)

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

(2)

The necessary business processing capacity are needed in the electronic banking system, and can satisfy the customer's demand for timely business processing;

(3)

An effective external attack detection mechanism shall have been established; and

(4)

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

Article 99

An application for adding or modifying any of the following new varieties of electronic banking shall be accepted and approved by the CBRC or any of its dispatched offices:

(1)

The services as required by any relevant law, regulation or administrative rule to be examined and approved, but for which the party concerned has not submitted an application but prepares to open up any of them by making use of electronic banking;

(2)

When applying the approved business to electronic banking, 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;

(3)

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

(4)

Trans-boundary electronic banking services; and

(5)

Other varieties of business prescribed by the CBRC.

Article 100

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning, addition or modification of varieties of electronic banking subject to examination and approval shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank or urban credit cooperatives joint--equity limited company for the beginning, addition or modification of varieties of electronic banking subject to examination and approval shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section V Issuances of Bank Cards

Article 101

To apply for issuing bank cards, a Chinese investment commercial bank shall meet the conditions as follows:

(1)

A good foundation for retail business;

(2)

In a good business situation, and its main risk supervisory indices meet the requirements;

(3)

Sound risk management and internal control systems for this kind of business shall have been established;

(4)

Qualified managers, technicians and corresponding management departments are needed;

(5)

A safe and highly efficient computer processing system; and

(6)

Other prudent conditions prescribed by CBRC.

What's more, a commercial bank shall accord with the relevant provisions on foreign exchange administration if it plans to issue foreign currency cards.

Article 102

An application of a state-owned commercial bank or joint -equity commercial bank for the issuance of bank cards shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank or urban credit cooperatives joint--equity limited company for the issuance of bank cards shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section VI Beginning of the Trust Business of Securities Investment Funds

Article 103

To apply for the beginning of the trust business of securities investment funds, a commercial bank shall meet the conditions as follows:

(1)

Its year-end net assets shall be no less than 2 billion Yuan in each latest 3 accounting year, and its capital adequacy ratio shall comply with the relevant provisions of the regulatory department;

(2)

A special fund trust department shall have been set up, and should be kept independent from other business departments;

(3)

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

(4)

The conditions for the safe custody of fund properties are needed:

a.

The equipment and facilities for engaging in the fund trust business;

b.

Accounts for each fund independently shall be set up, and the fund assets are kept in the integrity and independence;

c.

The trusted fund assets shall be strictly separated from its own assets for custody;

d.

The investment operations of fund manager shall be supervised according to the law;

e.

The fund manager's instructions shall be implemented according to the law to handle and distribute the fund assets;

f.

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, shall be reviewed and examined according to the law;

g.

The records, account books, statements and other relevant documents on the fund trust business operations shall be kept appropriately; and

h.

A sound system for the trust business.

(5)

A safe and highly efficient liquidation and delivery system:

a.

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

b.

Transaction data from the exchange shall be safely accepted;

c.

The systems of the fund manager, the fund registration institution, the securities registration and clearing institution and other relevant institutions shall be safely linked up with;

d.

The fund manager's investment instructions shall be legally implemented, and timely handle the matters on liquidation and delivery.

(6)

The fund trust department shall have a fixed place meeting the needs for business, and be equipped with an independent safety control system:

a.

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

b.

The business positions that may access to the fund transaction data shall be arranged in separate office rooms;

c.

A sound data confidentiality system on fund transaction;

d.

A safe data backup system on fund trust business; and

e.

An emergency handling scheme on fund trust business and the emergency handling capacity.

(7)

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

(8)

A sound internal auditing and control as well as risk control systems;

(9)

No serious illegal or serious rule breaking conducts in the latest 3 years;

(10)

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

Article 104

An application of a commercial bank or rural commercial bank for the beginning of the trust of securities investment funds shall be accepted by the CSRC, and be jointly examined and decided by CSRC and CBRC.

The CBRC shall make a decision on approval or disapproval within 20 days upon receipt of the jointly signed document from the CSRC, and notify it to the CSRC. If the CSRC makes a decision on disapproval, it shall explain the reasons in the notice.

Section VII Beginning of Domestic Securities Investment Trust Business of Qualified Foreign Institution Investors

Article 105

To apply for the beginning of the domestic securities investment trust business of qualified foreign institution investors, a commercial bank shall meet the conditions as follows:

(1)

A special fund trust department shall have been set up;

(2)

Its paid-in capital shall comply with the provisions in the relevant regulations;

(3)

Enough full-time employees familiar with the trust business;

(4)

The conditions for safe custody of all the fund assets;

(5)

The capacity for safe and highly efficient liquidation and delivery;

(6)

The status as a designated foreign exchange bank; and

(7)

No record in serious violation of foreign exchange administration provisions in the latest 3 years.

Article 106

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of the domestic securities investment trust business of qualified foreign institution investors shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of the domestic securities investment trust business of qualified foreign institution investors shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section VIII Beginning of National Social Security Fund Trust Business

Article 107

To apply for the beginning of the national social security fund trust business, a commercial bank shall meet the conditions as follows:

(1)

A special fund trust department shall have been set up;

(2)

Its paid-in capital shall accord with the relevant regulations;

(3)

Enough full-time employees familiar with the trust business;

(4)

The conditions for safe custody of all fund assets; and

(5)

The safe and highly efficient liquidation and delivery capacities.

Article 108

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of the domestic securities investment trust business of qualified foreign institution investors shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of the domestic securities investment trust business of qualified foreign institution investors shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section IX Beginning of Offshore Banking

Article 109

To apply for the beginning of offshore banking, a commercial bank shall meet the conditions as follows:

(1)

The business shall be operated in accordance with the laws and regulations, and have no serious violation or illegal or rule-breaking conducts in the latest 3 years;

(2)

The scale of foreign exchange assets has reached the scale as prescribed, and foreign exchange business operations are in good performances;

(3)

The foreign exchange practitioners shall meet the requirements for offshore banking, and have no records on bad in 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)

The risk management and internal control systems are sound and effective;

(5)

The place and facilities suitable for the offshore banking; and

(6)

Other prudent conditions prescribed by CBRC.

Article 110

The addition of any business variety by a commercial bank that has conducted the offshore banking shall be approved of the CBRC.

Article 111

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of offshore banking shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of offshore banking shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision, and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section X Beginning of -equity-Pledged Loan Business of Securities Companies

Article 112

To apply for the beginning of -equity-pledged loan business, a commercial bank shall meet the conditions as follows:

(1)

The business shall be in a good situation, and its main risk regulatory indices shall meet the requirements;

(2)

The risk management and internal control systems are sound and effective, and a uniform credit-granting system has been established and implemented;

(3)

The risk control measures and business operational flows relevant to the -equity-pledged loan business have been established;

(4)

A full-time department and staff take charge of operating and managing the -equity-pledged loan business;

(5)

A special business management information system shall have been established and be able to simultaneously grasp the -equity market situation and relevant important information on listed companies, and have the capacities of analyzing and researching the classified -equities as well as determining the pledge ratio; and

(6)

Other prudent conditions prescribed by CBRC.

Article 113

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of -equity-pledged loan business shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of -equity-pledged loan business shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision of the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section XI Beginning of Enterprise Annuity Fund Trusteeship Business

Article 114

To apply for the beginning of enterprise annuity fund trusteeship business, a commercial bank shall meet the conditions as follows:

(1)

Its registered capital shall be no less than 100 million Yuan, and it shall maintain no less than 150 million Yuan of net assets at any time;

(2)

A sound corporate governance structure;

(3)

The number of its full-time employees having the qualification for practicing the enterprise annuity fund business shall be enough and reach the prescribed standard;

(4)

The qualified business place, safety protection measures and other relevant facilities for its enterprise annuity fund trusteeship business are needed;

(5)

A sound internal auditing and control as well as risk control systems;

(6)

No serious cases or illegal or rule-breaking conducts in the latest 3 years; and

(7)

Other prudent conditions prescribed by the State.

Article 115

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of enterprise annuity fund trusteeship business shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of enterprise annuity fund trusteeship business shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section XII Beginning of Personal Financial Management Business

Article 116

The beginning of the following personal financial management business by a commercial bank 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 shall be approved by the CBRC.

Article 117

To apply for the beginning of the personal financial management business, a Chinese investment commercial bank shall meet the conditions as follows:

(1)

The corresponding risks management and internal control systems;

(2)

Senior managers and practitioners who have the work experiences and knowledge on carrying out the relevant business;

(3)

An effective system for identification, metrology, monitoring and control of market risks;

(4)

A good credit standing and no serious events injuring the interests of any customer within the latest 2 years; and

(5)

Other prudent conditions prescribed by CBRC.

Article 118

An application of a state-owned commercial bank or joint -equity commercial bank for the beginning of the personal financial management business shall be accepted, examined and decided by the CBRC, and the CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

An application of a city commercial bank for the beginning of the personal financial management business shall be accepted and preliminary examined by the local banking regulatory bureau, and the CBRC shall examine and make a decision , and the CBRC shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Section XIII Applications for the Beginning of Other Businesses

Article 119

If a city commercial bank or urban credit cooperatives joint--equity limited company applies for the beginning of other businesses or varieties as clearly prescribed by any of the laws and regulations presently in effect, the application shall be accepted by the banking regulatory sub-bureau at the locality of the institution or the banking regulatory bureau of the local city, and the banking regulatory bureau shall examine and make a decision , and the banking regulatory bureau shall make a written decision on approval or disapproval within 3 months upon receipt of the entire application documents.

Article 120

The applications for the beginning of other businesses or varieties as mistily prescribed by any of the laws and regulations presently in effect shall be governed by the separate provisions of the CBRC.

Chapter VII Granting of the Qualifications for Holding the Positions of Directors and Senior Managers

Section I Qualification for Holding Positions

Article 121

The board chairmen, vice chairmen, independent directors, other directors or secretaries of boards of directors of Chinese investment commercial banks shall be followed with the granting of qualifications for holding positions.

The qualifications of presidents, vice presidents, assistants to the president, general managers, deputy general managers, assistants to the general manager, general auditors, chief financial officers, internal audit persons in-charge, persons in-charge of financial departments of state-owned commercial banks, joint -equity commercial banks or city commercial banks, the presidents (general managers) or vice presidents (deputy general managers) of branches (branch-level exclusive institutions), or the presidents of sub-branches, the general managers or deputy general managers of urban credit cooperatives joint--equity limited companies, the managers of branches of urban credit cooperatives joint--equity limited companies, the council presidents, vice council presidents, directors, vice directors or other senior managers of urban credit cooperatives for holding positions shall be subject to the granting o.

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

Article 122

To apply for the qualification for holding the position of director or senior manager of a Chinese investment commercial bank, the person planning to hold the position shall meet the basic conditions as follows:

(1)

A natural person with full capacity for civil conduct;

(2)

He or she shall abide by laws and disciplines, be honest and credible, diligent and duteous, and have good personal virtues;

(3)

He or she shall have the knowledge, experiences and capabilities suitable for the position to be held;

(4)

He or she shall have good practicing records on economic and financial work;

(5)

He or she shall be familiar with economic and financial laws and regulations, and have good consciousness of regulation compliance management;

(6)

He or she shall be able to make sufficient information communication with the financial regulatory authority, and actively cooperate with the financial regulatory authority in the work; and

(7)

Other conditions prescribed by the CBRC.

Article 123

If a person planning to hold the position is under any of the circumstances as follows, he shall not hold the position of director or senior manager of a Chinese investment commercial bank:

(1)

He or she has the record on committing a crime intentionally;

(2)

He or she bears personal liabilities or direct leadership liabilities for the illegal or rule-breaking business activity or the 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 or she has the conduct in violation of the principle of good faith such as providing false documents, etc. when performing the work duties;

(4)

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

(5)

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

(6)

He or she is obviously in conflict of interests with the duties for the position of director or senior manager to be held;

(7)

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

(8)

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

(9)

Other circumstances prescribed in the laws or administrative regulations or by the CBRC.

Article 124

To apply for the qualification for holding the position of director, the person planning to hold the position shall meet the conditions as follows in addition to the conditions prescribed in Article122 and Article 123 :

(1)

No less than 5 years of work experience in law, economy, finance, accounting, or other fields good for performing the director's duties;

(2)

Using the financial institution's accounting statements and statistical statements to determine the financial institution's management and risk situation; and

(3)

The corporate governance structure, the articles of association, and the duties of the board of directors of the institution shall be known where he or she is to hold the position.

The person who plans to hold the position of independent director shall also be the expert in the field of law, economy, finance or accounting, and shall conform to the provisions in the Guidelines on Independent Director System and External Supervisor System of Joint--equity Commercial Banks.

Article 125

To apply for the qualification for holding the position of chairman of the board or vice chairman of the board, the person planning to hold the position shall meet the conditions as follows in addition to the conditions prescribed in Articles 122 through 124:

(1)

If planning to hold the position of the chairman or vice chairman of the board of directors of a state-owned commercial or joint -equity commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 8 years or more, or have undertaken the relevant economic work for 12 years or more (including at least 5 years of experience in financial work);

(2)

If planning to hold the position of chairman or vice chairman of the board of directors of a city commercial bank or urban credit cooperatives joint--equity limited company, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(3)

If planning to hold the position of council president or vice council president of an urban credit cooperative, he or she shall have obtained a technical secondary school diploma or above, and have undertaken the financial work for 5 years or more, or have undertaken the relevant economic work for 9 years or more (including at least 2 years of experience in financial work).

(4)

If planning to hold the position of secretary of the board of directors of a state-owned commercial or joint -equity commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work); if planning to hold the position of secretary of the board of directors of a city commercial bank or urban credit cooperatives joint--equity limited company, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 4 years or more, or have undertaken the relevant economic work for 8 years or more (including at least 2 years of experience in financial work); and

(5)

If planning to hold the position of the chairman or vice chairman of the board of directors of an overseas institution of a Chinese investment commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more, and masters a foreign language suitable for the post to be held.

Article 126

To apply for the qualification for holding the position of one type of senior managers of a Chinese investment commercial bank, the person planning to hold the position shall have good understanding of 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 excellent knowledge of the internal control system of the same type of institutions, and have the risk management capacity suitable for the position to be held.

Article 127

To apply for the qualification for holding the position of senior manager of a Chinese investment commercial bank, the person planning to hold the position shall meet the conditions as follows in addition to the conditions prescribed in Articles 122, 123 and 126:

(1)

If planning to hold the position of president or vice president of a state-owned commercial or joint -equity commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 8 years or more, or have undertaken the relevant economic work for 12 years or more (including at least 4 years of experience in financial work);

(2)

If planning to hold the position of president or vice president of a city commercial bank or general manager or deputy general manager of an urban credit cooperatives joint--equity limited company, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(3)

If planning hold the position of director general or vice director general of an urban credit cooperative, he or she shall have obtained a technical secondary school diploma or above, and have undertaken the financial work for 4 years or more, or have undertaken the relevant economic work for 9 years or more (including at least 2 years of experience in financial work);

(4)

If planning to hold the position of president (general manager) or vice president (deputy general manager) of an overseas institution of a Chinese investment commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work) and masters a foreign language suitable for the post to be held;

(5)

If planning to hold the position of assistant of the president of a state-owned commercial or joint -equity commercial bank, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work); or if planning to hold the position of assistant of the president (general manager or director) of a city commercial bank or urban credit cooperatives joint--equity limited company, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 4 years or more, or have undertaken the relevant economic work for 8 years or more (including at least 2 years of experience in financial work);

(6)

If planning to hold the position of chief auditor or person-in-charge of the internal auditing department, he or she shall have obtained an undergraduate diploma or above, and have obtained the nationally or internationally accredited professional title of the senior level in the field of audit (or have passed the nationally or internationally accredited professional technical qualification examination in the field of accounting or audit), and have undertaken the finance, accounting or audit for 6 years or more; and

(7)

If planning to hold the position of general accountant or person-in-charge of financial department, he or she shall have obtained a junior college diploma or above, have obtained the nationally or internationally accredited professional title of the senior level in the field of accounting (or have passed the nationally or internationally accredited professional technical qualification examination in the field of accounting), and have undertaken the finance, accounting or audit for 6 years or more.

Article 128

To apply for the qualification for holding the position of senior manager of a Chinese investment commercial bank, the person planning to hold the position shall meet the conditions as follows in addition to the conditions prescribed in Articles 122, 123 and 126:

(1)

If planning to hold the position of president or vice president of a first-class branch (branch directly under the general office) of a state-owned commercial bank, of president or vice president of a branch (sub-branch directly under the general office in any other place) of a joint -equity commercial bank, of the general manager (director) or deputy general manager (vice director) of the business management department of the general office, of the general manager or deputy general manager of a branch-level exclusive institution, he or she shall have obtained an undergraduate diploma or above, and have undertaken the financial work for 6 years or more, or have undertaken the relevant economic work for 10 years or more (including at least 3 years of experience in financial work);

(2)

If planning to hold the position of president or vice president of a second-class branch (sub-branch directly under a first-class branch) of a state-owned commercial bank, he or she shall have obtained a junior college diploma or above, and have undertaken the financial work for 5 years or more, or have undertaken the relevant economic work for 9 years or more (including at least 2 years of experience in financial work); and

(3)

If planning to hold the position of president of a sub-branch of a state-owned commercial bank, joint -equity commercial bank or city commercial bank, or of the manager or the vice president or manager for temporary management for three months or more of a branch of an urban credit cooperatives joint--equity limited company, he or she shall have obtained a junior college diploma or above, and have undertaken the financial work for 4 years or more, or have undertaken the relevant economic work for 8 years or more (including at least 2 years of experience in financial work).

Article 129

If the person planning to hold the position fails to meet the above-mentioned 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 or she shall be recognized as having met the corresponding requirement on the educational background.

Article 130

If the person planning to hold the position fails to meet the above-mentioned requirement on educational background, but has got the qualification of certified public accountant, certified public auditor or a senior professional technical title relevant to the position to be held, he or she shall be recognized as having met the corresponding requirement on the educational background, provided that among the qualification conditions for holding the position, his or her term of financial work shall be increased 4 years.

Article 131

As to a person planning to hold the position but failing to completely meet the conditions listed in Article 122 , Item (1) of Article 124 and Articles 125, 127, 128 or 129, if the Chinese investment commercial bank considers that he or she 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 II Procedures for Granting the Qualifications for Holding Positions

Article 132

An application of the legal person institution of a state-owned commercial bank, the business management department of the general office or the legal person institution of a joint -equity commercial bank for the qualification for holding the position of director or senior manager shall be submitted by the legal person institution to the CBRC for acceptance, examination and decision. The CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the application.

Article 133

An application of a first-class branch (branch directly under the general office) of a state-owned commercial bank, of a sub-branch (sub-branch directly under the general office in any other place) of a joint -equity commercial bank, or a branch-level exclusive institution for the qualification for holding the position of senior manager shall be submitted by the legal person institution to the banking regulatory bureau at the locality where the position is to be held for acceptance, examination and decision. And a written decision on approval or disapproval shall be made by the banking regulatory bureau shall within 30 days upon acceptance of the application.

An application of the legal person institution of a city commercial bank or urban credit cooperatives joint--equity limited company for the qualification for holding the position of director or senior manager shall be submitted by the legal person institution with the banking regulatory sub-bureau at the locality where the position is to be held or the banking regulatory bureau of the local city for acceptance and preliminary examination, and the banking regulatory bureau shall examine and make a decision. The banking regulatory bureau shall make a written decision on approval or disapproval within 30 days upon receipt of the entire application documents or the day of direct acceptance of the application, of which, an application for the qualification for holding the position of board chairman or president (general manager) shall be reported to the CBRC for archival submitted before the banking regulatory bureau makes a decision.

If the aforesaid person planning to hold the position shall be followed to case-by-case examination, the application shall be accepted and preliminary examined by the banking regulatory bureau, and the CBRC shall examine and make a decision. The CBRC shall make a written decision on approval or disapproval within 3 months upon acceptance of the entire application documents.

Article 134

An application of a second-class branch (sub-branch directly under a first-class branch) or any lower institution, of a sub-branch of a joint -equity commercial bank, city commercial bank or urban credit cooperatives joint--equity limited company for the qualification for holding the position of senior manager shall be submitted by the institution in charge of appointment and removal at the next higher level of the person planning to hold the position with the banking regulatory sub-bureau at the locality where the position is to be held for acceptance, examination and decision. The banking regulatory sub-bureau shall make a written decision on approval or disapproval within 30 days upon acceptance of the application.

If the aforesaid person planning to hold the position must be followed to case-by-case examination, the application shall be accepted and preliminary examined by the banking regulatory sub-bureau, and the banking regulatory bureau shall examine and make a decision . The banking regulatory bureau shall make a written decision on approval or disapproval within 30 days upon receipt of the entire application documents.

If there is no banking regulatory sub-bureau at the locality where the position is to be held, the appointment and removal institution at the next higher level of the person planning to hold the position shall submit an application to the banking regulatory bureau at the locality where the position is to be held for acceptance, examination and decision.

Article 135

An application of an overseas institution of a state-owned commercial bank or joint -equity commercial bank for the qualification for holding the position of direct or senior manager shall be submitted by the legal person institution with the CBRC for acceptance, examination and decision. And a written decision on approval or disapproval shall be made by the CBRC within 30 days upon acceptance of the application.

An application of an overseas institution of a city commercial bank for the qualification for holding the position of senior manager shall be submitted by the legal person institution with the local banking regulatory bureau for acceptance and preliminary examination, and the CBRC shall examined and make a decision. And a written decision on approval or disapproval shall be made by the CBRC within 3 months as of the receipt of the entire application documents.

Article 136

When a Chinese investment commercial or any of its branch is newly established, the application for the qualification for holding the position of director or senior manager shall be accepted, examined and decided by referring to the procedures for the examination and approval of this institution's beginning of business.

Article 137

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

Article 138

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 submitted. Before the person holds the position, the institution shall submit an audit report on his leaving the position or an economic liability audit report and the relevant documents on holding the position to the banking regulatory sub-bureau at the locality where the position is to be held or the banking regulatory bureau of the local city, and the regulatory institution at the locality where the position is to be held or the banking regulatory bureau of the local city shall solicit the regulatory appraisal opinions of the banking regulatory sub-bureau at the locality where the position was held in the past or the banking regulatory bureau of the local city.

If any of the circumstances as follows occurs, the banking regulatory sub-bureau at the locality where the position is to be held or the banking regulatory bureau of the local city shall notify the person planning to hold the position and the Chinese investment commercial bank for which he works to apply anew for the qualification for holding the position in the written form:

(1)

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

(2)

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

(3)

The regulatory appraisal opinions of the banking regulatory sub-bureau at the locality where the position was held in the past or the banking regulatory bureau of the local city indicate that the person planning to hold the position might be in a circumstance under which he fails to meet qualification conditions as prescribed in these Measures for holding positions; or

(4)

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

Chapter VIII Supplementary Provisions

Article 139

For the licensing matters on modification of institutions, within 6 months as of the day when the administrative licensing decision is made, a Chinese investment commercial bank shall complete the modification and report to the decision-making organ and the local dispatched office of the CBRC; as for the licensing matters on the qualifications for the positions of directors or senior managers, within 3 months as of the day when the administrative licensing decision is made, the person planning to hold the position shall be on his or her position and report to the decision-making organ and the local dispatched office of the CBRC, unless there are different provisions in the laws or administrative regulations.

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 licensing decision shall be abated, and the decision-making organ shall logout the administrative licensing.

Article 140

If the establishment, modification or termination of a Chinese investment commercial bank involves the legal procedures concerning registration or modification in respect of industrial and commercial administration or taxation, the party concerned shall report to the decision-making organ and the local dispatched office of the CBRC within 1 month after completing relevant modification procedures.

Article 141

The conditions and procedures for the licensing of modification of the legal person institution or branch of a financial assets management company shall be determined in the light of those for the legal person institution or branch of a state-owned commercial bank; and the conditions and procedures for granting the qualifications for holding the position of senior manager in the legal person institution or branch of a financial assets management company shall be determined in the light of those for the legal person institution or first-class branch of a state-owned commercial bank.

Article 142

The words "more than" mentioned in these Measures shall include the given figure itself or the same level thereof.

Article 143

The right of interpreting these Measures shall remain with the CBRC.

Article 144

These Measures shall enter into effect as of February 1, 2006. If the relevant provisions promulgated before these Measures enter into effect are inconsistent with these Measures, these Measures shall prevail.