Laws of the People's Republic of China

The People's Bank of China

Unifying the Policies on Controlling Interest Rates of Foreign Currency Deposits and Loans for Chinese and Foreign Capital Financial Institutions Inside the Territory of China

Announcement [2002] No.4 of the People's Bank of China

March 4, 2002

In order to regulate the control of the interest rates of foreign currency deposits and loans for Chinese and foreign capital financial institutions, the People's Bank of China hereby decides to unify the policies on controlling interest rates of foreign currency deposits and loans for Chinese and foreign capital financial institutions inside the territory of China from March 1, 2002:

I.

The small amount of foreign currency deposits of Chinese residents inside the territory (including the enterprise legal persons, public institution legal persons, State organs, organizations and army units lawfully established inside the territory of China as well as the natural persons residing inside the territory of China for no less than one year), which are deposited in foreign capital financial institutions inside the territory, shall be brought into the present scope of control by the People's Bank of China on the interest rates of small amount of foreign currency deposits. That is, for the small amount of deposits of Chinese residents of less than 3 million USD (or the equal value of other foreign currency), both the Chinese and foreign capital financial institutions shall execute the interest rates stipulated by the People's Bank of China.

The interest rates of the small amount of foreign currency deposits of non-Chinese residents shall be determined by the Chinese and foreign capital financial institutions themselves.

II.

The present policies on the interest rates of large amount of foreign currency deposits shall remain unchanged. That is, the interest rates of the large amount of deposits of Chinese residents and non-Chinese residents of more than 3 million USD (or the equal value of other foreign currency) shall be negotiated and determined between the Chinese or foreign capital financial institutions and their clients.

III.

The interest rates of foreign currency loans and the methods of calculation and settlement shall be determined by the Chinese and foreign capital financial institutions themselves according to the alterations of interest rates in the international financial market as well as such factors as cost of funds, differences of risks, etc..

IV.

The present policies on the interest rates of Renminbi deposits and loans for foreign capital financial institutions shall remain unchanged.

V.

Every financial institution shall, according to this Announcement, submit as a legal person the measures on controlling its own foreign currency interest rates as well as the levels of interest rates of foreign currency deposits and loans to the People's Bank of China for record.