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This Measure is formulated in accordance with the Regulations on the Control of Foreign-invested Financial Institutions, the Regulations on the Control of Foreign Exchanges and other applicable provisions on the control of foreign debts for purpose of promoting fair competition between Chinese banks and foreign banks and of avoiding risks caused by foreign debts by effectively controlling the amount of them.
The “Foreign-invested Banks” shall refer to the solely foreign-owned banks, the Sino-foreign joint venture banks and the branches of foreign banks established within the territory of China in accordance with the Regulations on the Control of Foreign-invested Financial Institutions and the relevant laws and regulations. The state shall control the total amount of foreign debts of Foreign-invested banks within China. The foreign debts of a Foreign-invested bank within China shall include the overseas loans, overseas inter-bank borrowing, overseas inter-bank deposits, the business of overseas inter-bank and their subordinated institutions (debtor), non-resident deposits and other forms of foreign debts. The NDRC shall, together with the CBRC and the SAFE, according to the need of national economy and social development, the status of international balance of payments and the capability for bearing the foreign debts, as well as the status of assets and liabilities of Foreign-invested banks within China and the demand for working capital, etc., properly determine the total amount of foreign debts of Foreign-invested banks within China and the target for the structural adjustment and control of medium-term and long-term and short-term foreign debts. Where a Foreign-invested bank within China borrows medium and long-term foreign debts with the term of over one year as signed in the agreement, the NDRC shall verify the amount of foreign debts occurred by year. If the foreign debts are short-term debts with the term less than one year as signed in the agreement, the SAFE shall verify the balance. Before the end of February each year, all the Foreign-invested banks within China shall file an application respectively to the NDRC or SAFE for the amount of medium and long-term foreign debts occurred or short-term balance of foreign debts of the current year. Among them, the solely foreign-owned banks and the Sino-foreign joint venture banks shall file an application to the NDRC or SAFE level by level through the branch of the NDRC or SAFE at the place where they made the business registration. The branch of any foreign bank shall file an application directly to the NDRC and SAFE through its chief reporting bank in China. If it has no chief reporting bank, it shall file an application to the NDRC and the SAFE level by level through the branch of the NDRC or SAFE at the place where it makes the business registration.
The NDRC and the SAFE shall, on the basis of the foreign debts borrowing conditions of any Foreign-invested bank within China in the previous year, the annual line of credit to the debtors in China as approved by its overseas parent bank or regional management department, and the domestic demand for loan projects (medium and long-term foreign debts) and the floating demand (short-term foreign debts), verify respectively the amount of medium and long-term foreign debts occurred and the balance of short-term foreign debts of the Foreign-invested banks within China in the current year. After the total amount of foreign debts is determined, a Foreign-invested bank within China may, upon the need of the business, apply for making adjustment for once in the current year to the NDRC or SAFE. The granting of foreign exchange loans by any Foreign-invested bank within China to any domestic institution shall be managed in light of the ways of foreign exchange loans in China. Except the bill purchased, the Foreign-invested bank within China shall not settle the foreign exchange when extending foreign exchange loans to the domestic institution. Where any Foreign-invested bank in China provides foreign guaranty, it shall be managed as the foreign guaranty. The granting of guaranty to any Foreign-invested bank within China for any debtor in China by any domestic institution shall be managed as domestic guaranty.
The SAFE shall be responsible for the work of statistics and monitoring of foreign debts of Foreign-invested banks and domestic foreign exchange debts. A Foreign-invested bank within China shall submit statistical data of foreign debts to the branch of the SAFE at its registration place within 5 working days at the beginning of each month, and submit the relevant information on domestic foreign exchange loans to the local Control of foreign exchange according to the relevant provisions on the domestic foreign exchange loans. The SAFE shall make on-site or off-site inspection on the borrowing of foreign debts and granting of foreign exchange loans periodically or a periodically.
The present Measures are released by the National Development and Reform Commission, People’s Bank of China, and China Banking Regulatory Commission on May 27, 2004 and shall come into force 30 days as of the date of promulgation.
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