What laws apply to the operation of banks and financial institutions in China?

In China, the Bank and Financial Institutions Law (BFI Law) applies to the operations of banks and financial institutions. The law was enacted in 2011 and underwent amendments in 2014, 2015, and 2019. Under the BFI Law, banks and financial institutions are subject to the regulations of the People’s Bank of China and the China Banking Regulatory Commission (CBRC). Banks are responsible for creating and implementing internal risk management systems and conducting business activities in accordance with the principles of fairness, openness, and honesty. The BFI Law also sets rules for the regulation and management of banks and financial institutions. It requires them to apply the Chinese currency (RMB) to settle all their business activities, manage their operational funds strictly, and disclose accurate financial and accounting information. In addition, the law defines the scope of business operations that these institutions can undertake and sets limits on how much they may loan and invest. Banks and financial institutions in China are also required to comply with international standards and participate in the international market. They are required to meet international standards in areas such as capital adequacy, prudential lending and borrowing, market risk, and liquidity risk. The BFI Law also allows foreign financial institutions to operate in China, provided they comply with Chinese laws and regulations. By establishing and implementing the BFI Law, the Chinese government seeks to protect the interests of consumers and promote the development of the banking and financial sectors.

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What laws apply to the operation of banks and financial institutions in China?

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