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Bank Association Debuts
The China Association of Banks (CAB), a non-governmental organization that co-ordinates bank operations, debuted Wednesday in Beijing after three years of preparation.
Twenty-two banks, including four State-owned, three policy banks and 11 share-holding commercial banks, became the initial members.
According to the CAB constitution, the association will admit any commercial and policy bank and local bank associations as members if they accept its guidelines.
"Foreign-funded banks will also be attracted to the association,'' said Jiang Jianqing, president of the Industrial and Commercial Bank of China and the first chairman of CAB.
The association will have mainly three functions, said Jiang. They will: Regulate banks' operations and eliminate malicious competition; supervise members' carrying out of related laws and regulations; and provide services and ensure that members enjoy their proper rights.
The central bank will gradually transfer some of its non-administrative work to the association, said Dai Xianglong, governor of the People's Bank of China.
CAB will play an important role in further rectifying the financial market, deepening the financial system reform, enhancing co-operation of Chinese and foreign banks, and cementing the links between banks, the government and enterprises, Jiang said.
"Establishment of CAB is significant in enforcing self-discipline in China's banking sector,'' said Wu Zhipan, a senior legal expert.
May 10 also marked the fifth anniversary of China's Commercial Bank Law.
"The law has made great contributions to the development and reform of China's commercial bank sector in the past years,'' said Dai.
By the end of last year, the overall assets of China's commercial banks amounted to 12.41 trillion yuan (US$1.495 trillion), 70 per cent of the 17.75 trillion yuan (US$2.14 billion) total assets of China's financial sector including securities and insurance, he said.
In the future, commercial banks should speed up their reforms to enhance their independence and set up modern financial systems.
They should also enlarge their service areas by involving themselves in intermediary, international and on-line businesses.
The central bank will evaluate and appraise commercial banks to check on the truthfulness of their asset quality and profitability starting this year, said Dai.
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