BEIJING, March 13 (Xinhua) -- China will form a banking and insurance regulatory commission to replace China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC), according to a cabinet reshuffle plan.

The new body will enhance oversight of both banking and insurance industries, by combining responsibilities of supervising the banking and insurance industries, preventing and dissolving financial risks, and protecting financial product consumers' rights, according to the plan submitted to the national legislature for deliberations Tuesday.

The move is aimed at solving existing problems such as unclear responsibilities, cross-regulation and absence of supervision, said State Councilor Wang Yong when explaining the plan to the lawmakers.

According to analysts, the new banking and insurance regulator is losing some powers to the People's Bank of China, another sign of the growing regulatory power of the country's central bank, given certain CBRC and CIRC functions, including drafting key regulations and prudential oversight, will be shifted to the bank.

China will also set up a state market regulatory administration to shoulder the responsibilities including comprehensive market supervision and management, market entity registration and market order maintenance.

Meanwhile, the commission will be in charge of safety supervision of industrial products as well as food and special equipment, while managing measurement criteria, examination and testing, certification and accreditation issues.

Given the specificity of drug supervision, China will form a state drug administration, which will be affiliated to the state market regulatory administration.

The State Administration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and the China Food and Drug Administration will be dismantled as their functions will be incorporated into the new administration, Wang said.