Laws of the People's Republic of China

Contents

Chapter¢񠇥neral Provisions

Chapter¢򠏲ganizational Structure

Chapter¢󠔨e Renminbi

Chapter¢��siness Operations

Chapter¢��nancial Supervision and Control

Chapter¢��nancial Affairs and Accounting

Chapter¢��gal Liabilities

chapter¢𠓵pplementary Provisions

Chapter¢񠇥neral Provisions

   Article 1 This Law is enacted in order to define the status and functions of the People's Bank of China, ensure the correct formulation and implementation of the State's monetary policies, establish and perfect a macro-control system through a central bank and strengthen supervision and control over the banking industry.

   Article 2 The People's Bank of China is the central bank of the People's Republic of China.

The People's Bank of China shall, under the leadership of the State Council, formulate and implement monetary policies and exercise supervision and control over the banking industry.

   Article 3 The aim of monetary policies shall be to maintain the stability of the value of the currency and thereby promote economic growth.

   Article 4 The People's Bank of China shall perform the following functions:

(1) to formulate and implement monetary policies in accordance with law;

(2)to issue Renminbi(RMB) and control its circulation;

(3)to examine, grant approval to, supervise and administer banking institutions in accordance with regulations;

(4)to supervise and control the financial market in accordance with regulations;

(5)to promulgate orders, rules and regulations concerning financial supervision and control and business operation;

(6)to hold,administer and manage the State foreign exchange reserve and gold reserve;

(7)to manage the State Treasury;

(8)to maintain the normal operation of the systems for making payments and settling accounts;

(9)to be responsible for statistics, investigation, analysis and forecasting concerning the banking industry;

(10)to engage in relevant international banking operations in its capacity as the central bank of the State; and

(11)other functions prescribed by the State Council.

To implement monetary policies, the People's Bank of China may carry out financial operations in accordance with the relevant provisions of Chapter ¢�� this Law.

   Article 5 The People's Bank of China shall report its decisions to the State Council for approval concerning the annual money supply, interest rates, foreign exchange rates and other important matters specified by the State Council before they are implemented.

The People's Bank of China shall immediately implement the decisions on monetary policies for matters other than those specified in the preceding paragraph and report them to the State Council for the record.

   Article 6 The People's Bank of China shall submit a work report to the Standing Committee of the National People's Congress concerning matters relating to monetary policies and financial supervision and control.

   Article 7 The People's Bank of China shall, under the leadership of the State Council, implement monetary policies, perform its functions and carry out its business operations independently according to law and be free from intervention by local governments, government departments at various levels, public organizations or individuals.

   Article 8 Al capital of the People's Bank of China is invested by the State and owned by the State.

Chapter¢򠏲ganizational Structure

   Article 9 The People's Bank of China shall have a Governor and a certain number of Deputy Governors.

The candidate for the Governor of the People's Bank of China shall be nominated by the Premier of the State Council and decided by the National People's Congress; when the National People's Congress is not in session, the Governor shall be decided by the Standing Committee of the National People's Congress and appointed or removed by the President of the People's Republic of China. The Deputy Governors of the People's Bank of China shall be appointed or removed by the Premier of the State Council.

   Article 10 The People's Bank of China shall practise a system wherein the Governor shall assume overall responsibility. The Governor shall direct the work of The People's Bank of China, the Deputy Governors shall assist the Governor in his or her work.

   Article 11 The people's Bank of China shall establish a monetary policy committee, whose functions, composition and working procedures shall be prescribed by the State Council and reported to the Standing Committee of the National People's Congress for the record.

   Article 12 The People's Bank of China shall establish branches as its representative organs in light of the need of performing its functions and exercise centralized and unified leadership and administration with respect to its branches.

The branches of The People's Bank of China shall, as authorized by The People's Bank of China, be responsible for financial supervision and control and handling of relevant business operations in their respective districts.

   Article 13 The Governor, Deputy Governors and other staff members of The People's Bank of China shall scrupulously abide by their duties; they may not abuse their power or conduct malpractice for private ends and they may not assume concurrent position in any other banking institutions, enterprises or foundations.

   Article 14 The Governor, Deputy Governors and other staff members of People's Bank of China shall safeguard State secrets according to law and be obligated to safeguard the secrets of the banking institutions and parties concerned under their supervision and control.

Chapter¢󠔨e Renminbi

   Article 15 The legal tender of The People's Republic of China is the Reminbi(RMB).When the Renminbi is used to repay all public or private debts within the territory of the People's Republic of China, no units or individuals may refuse to accept it.

   Article 16 The unit of the Renminbi is the yuan and the units of the fractional currency of the Renminbi are the jiao and the fen.

   Article 17 The Renminbi shall be printed and issued solely by the People's Bank of China.

When putting forth a new Renminbi issue, The People's Bank of China shall make known to the public the issuing date, face values, designs, patterns and specifications.

   Article 18 It is prohibited to counterfeit or alter Renminbi. It is prohibited to sell or purchase counterfeit or altered Renminbi. It is prohibited to transport, hold or use counterfeit or altered Renminbi. It is prohibited to deliberately destroy or damage the Renminbi. It is prohibited to illegally use the patterns of Renminbi in propaganda materials, publications or other commodities.

   Article 19 No units or individuals may print or sell promissory notes as substitutes for Renminbi to circulate on the market.

   Article 20 The damaged or soiled Renminbi shall be exchanged in accordance with the regulations of The People's Bank of China, which shall also be responsible to recall and destroy such Renminbi.

   Article 21 The People's Bank of China shall establish a Renminbi issue treasury and shall establish subsidiary issue treasuries at its branches. The subsidiary issue treasuries shall, in allocating Renminbi issue fund, act on the order of allocation from their superior treasury. No units or individuals may use the issue fund in violation of regulations.

Chapter¢��siness Operations

   Article 22 To implement monetary policies, The People's Bank of China may apply the following monetary policy instruments:

(1)to require a banking institution to place a deposit reserve at a prescribed ratio;

(2)to fix the base interest rates for the central bank;

(3)to handle rediscount for baking Institutions that have opened accounts in The People's Bank of China;

(4)to provide loans for commercial banks;

(5)to deal in State bonds and other government bonds and foreign exchange on the open market; and

(6)other monetary policy instrument decided by the State Council.

When applying the monetary policy instruments listed in the preceding paragraph to implement monetary policies, The People's Bank of China may work out specific requirements and procedures.

   Article 23 The People's Bank of China shall manage the State treasury in accordance with laws and administrative rules and regulations.

   Article 24 The People's Bank of China may, on behalf of the financial department under the State Council, issue to banking institutions, and honour State bonds and other government bonds.

   Article 25 The People's Bank of China may open accounts for banking institution as needed, but may not allow them to overdraw.

   Article 26 The People's Bank of China shall organize or assist in organizing a clearing system among banking institutions, coordinate the efforts of the financial institutions in matters of clearing and provide services in this regard. The specific measures therefor shall be formulated by The People's Bank of China.

   Article 27 The People's Bank of China may, as required by the implementation of monetary policies, determine the amounts, term, interest rates and forms of loans extended to commercial banks, however, the maximum term of loans shall not exceed one year.

   Article 28 The People's Bank of China may not make an overdraft for the government, and may not directly subscribe or underwrite State bonds or other government bonds.

   Article 29 The People's Bank of China may not provide loans to the local governments or government departments at various levels, to non-banking institutions, other units or individuals, with the exception of the specific non-banking institutions as decided by the State Council.

The People's Bank of China may not provide guaranty for any unit or individual.

Chapter¢��nancial Supervision and Control

   Article 30 The People's Bank of China shall, in accordance with law, exercise supervision and control over banking institutions and their business operations to maintain the legitimate, stable and sound operation of the banking industry.

   Article 31 The People's Bank of China shall, in accordance with regulations, examine and approve the establishment, modification and termination of banking institutions, as well as the scope of their business operations.

   Article 32 The People's Bank of China shall have the power to examine, inspect and supervise at any time the deposits, loans, settlements, bad accounts, etc. Of banking institutions.

The People's Bank of China shall have the power to inspect and supervise banking institutions as to whether they raise or lower the interest rates on deposits or loans in violation of regulations.

   Article 33 The People's Bank of China shall have the power to demand banking institutions to submit according to regulations balance sheets of their assets, statements of profit and loss and other financial and accounting reports and data.

   Article 34 The People's Bank of China shall be responsible for compiling unified statistics and accounting statements from the national banking system and shall publish them in accordance with relevant regulations of the State.

   Article 35 The People's Bank of China shall guide and supervise the business operations of the policy-oriented banks of the State.

   Article 36 The People's Bank of China shall establish and perfect systems for its own examination and inspection and strengthen its own supervision and administration.

Chapter¢��nancial Affairs and Accounting

   Article 37 The People's Bank of China shall exercise independent control over its financial budget.

The budget of The People's Bank of China shall be incorporated in the central budget after it has been examined and verified by the financial department under the State Council and the implementation thereof shall be subject to supervision of the financial department under the State Council.

   Article 38 The People's Bank of China shall, after withdrawing funds for its general reserve at a proportion determined by the financial department under the State Council, turn over to the State treasury the entire net profit remaining from its income in an accounting year minus its expenditures in the same period.

Losses sustained by The People's Bank of China shall be made up by appropriations from the State treasury.

   Article 39 The financial receipts and payments and accounting affairs of The People's Bank of China shall be governed by laws, administrative rules and regulations and unified State financial and accounting systems and be subject to the auditing and supervision conducted, in accordance with law, separately by the audit institution and the financial department under the State Council.

   Article 40 The People's Bank of China shall, within three months after the end of every accounting year, compile balance sheets of its assets, statements of profit and loss and relevant financial and accounting reports, prepare its annual report and publish them in accordance with relevant regulations of the State.

The fiscal year of The People's Bank of China begins on the first day of January and ends on the thirty-first day of December of the Gregorian calendar.

Chapter¢��gal Liabilities

   Article 41 Anyone who counterfeits Renminbi or sells counterfeit Renminbi, or knowingly transports counterfeit Renminbi shall be investigated for criminal responsibility in accordance with law.

Anyone who alters Renminbi or sells altered Renminbi or knowingly transports altered Renminbi, if the case constitutes a crime, shall be investigated for criminal responsibility; if the case is not serious, he shall be put by a public security organ in detention of not more than 15 days and imposed with a fine of not more than 5,000 yuan.

   Article 42 Anyone who buys counterfeit or altered Renminbi or knowingly holds or uses counterfeit or altered Renminbi, if the case constitutes a crime, shall be investigated for criminal responsibility; if the case is not serious, he shall be put by a public security organ in detention of not more than 15 days and imposed with a fine of not more than 5,000 yuan.

   Article 43 If anyone illegally uses the patterns of Renminbi in propaganda materials, publications or other commodities, the People's Bank of China shall order him to set it right and shall destroy the illegally used patterns of Renminbi, confiscate the illegal gains and impose a fine of not more than 50,000 yuan.

   Article 44 If anyone prints or sells promissory notes as substitutes for Renminbi to circulate on the market, the People's Bank of China shall order him to cease his illegal act and impose a fine of not more than 200,000 yuan.

   Article 45 If anyone violates the provisions of laws or administrative rules and regulations concerning financial supervision and control, the People's Bank of China shall order him to cease his illegal act and impose on him administrative punishment in accordance with law; if the case constitutes a crime, he shall be investigated for criminal responsibility.

   Article 46 If any party refuses to accept the administrative punishment, he may institute an administrative lawsuit in accordance with the Administrative Procedure Law of the People's Bank of China.

   Article 47 If the People's Bank of China commits any of the following acts, the persons directly in charge and other persons directly responsible for the offense shall be subject to administrative sanctions according to law; if the case constitutes a crime, the offenders shall be investigated for criminal responsibility according to law:

(1)to provide a loan in violation of the provisions in the first paragraph of Article 29;

(2)to provide guaranty for a unit or individual; or

(3)to use the issue fund without authorization.

If any of the acts specified in the preceding paragraph results in losses, the persons directly in charge and other persons directly responsible for the offense shall be partially or wholly liable for the losses.

   Article 48 If a local government or a government department at any level, a public organization or an individual forcibly demands the People's Bank of China or its staff member to provide a loan or a guaranty in violation of the provisions in Article 29, the persons directly in charge and other persons who are directly responsible for the offense shall be subject to administrative sanctions in accordance with the law; if the case constitutes a crime, the offenders shall be investigated for criminal responsibility according to law; if losses are caused, the offenders shall be partially or wholly liable for the losses.

   Article 49 If any staff member of the People's Bank of China divulges State secrets and if the case constitutes a crime, he shall be investigated for criminal responsibility according to law; if the case is not serious, he shall be subject to administrative sanction according to law.

   Article 50 If any staff member of the People's Bank of China commits embezzlement, accepts bribes, conducts malpractices for personal ends, abuses his power or neglects his duty and if the case constitutes a crime, he shall be investigated for criminal responsibility according to law; if the case is not serious, he shall be subject to administrative sanction according to law.

chapter¢𠓵pplementary Provisions

   Article 51 This Law shall be effective on the date of promulgation.