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Last updated at: (Beijing Time) Thursday, May 29, 2003

China's New Banking Supervisory Authority Makes Debut

China's newly founded banking supervisory authority made its debut Thursday and publicized its objectives for regulation and supervision at a press conference. CBRC has five major tasks underway. According to Liu Mingkang, chairman of CBRC, it has set a target for the non-performing loans (NPL) in the four state-owned commercial banks to drop three to four percent in 2003.


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China's New Banking Supervisory Authority Makes Debut
China Banking Regulatory Commission(CBRC) has set a target for the non-performing loans (NPL) in the four state-owned commercial banks to drop three to four percent in 2003, with the outstanding NPLs decreasing 70 to 80 billion yuan (8.42 to 9.64 billion US dollars).

Liu Mingkang, chairman of CBRC, made this announcement at a press conference Thursday.

The weighted average of the NPLs in the four banks was 26.12 percent by the end of 2002, Liu said. By the end of March this year, he added, the number dropped 1.99 percent to 24.13 percent, with the outstanding NPLs decreasing 27.1 billion yuan (3.27 billion US dollars) since the end of 2002.

Organizational work
The work of CBRC has been proceeding steadily and orderly as central authorities planned, according to a press conference held by the CBRC Thursday.

The CBRC and the People's Bank of China (PBC) have been working in cooperation very well. A provisional leading group set up by the two institutions has formulated and issued the relevant notices and regulations, which spell out the explicit requirements for the work of organizing the CBRC's branch organs.

At present, the internal plans of the CBRC have basically been finalized and almost all personnel have been positioned. The plan for the establishment for the CBRC's subsidiary bodies has been submitted to the office of the Central Institutional Establishment Commission for approval.

Once approved, the work of organizing the CBRC's branch organs is expected to be completed by the end of June.

Operation objectives
China's newly founded banking supervisory authority made its debut Thursday and publicized its objectives for regulation and supervision at the press conference.

The establishment of the CBRC will be important for the safety, soundness and efficient functioning of the financial system in China, said CBRC at the press conference.

The objectives of CBRC is defined to protect the interests of depositors and consumers by prudential and effective supervision, and accordingly help increase the confidence among the public for the market.

CBRC should also promote the public understanding of modern finance by way of education, and try to reduce the financial crimes and keep the stability of the financial market.

Major tasks
China Banking Regulatory Commission has five major tasks underway, according to the source from the commission Thursday.

According to the CBRC at Thursday's press conference, the tasks include: an overall assessment of the risk profile of all deposit-taking institutions; a comprehensive on-site review of the supervisory loan classification system and areas for potential improvement; to promote the comprehensive reform of the state-owned banks and undertake a trial project for restructuring rural credit cooperatives; the revision of banking rules and regulations in line with the legally defined regulatory and supervisory responsibilities; and the stress on development, while exploring creative thinking and new approaches to addressing the problems at hand in the interest of further reform and opening up to the outside world.


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