Interim Measures for Preventing and Dealing with Payment Risks of Financial Institutions

Chapter I: General Provisions

　　Article 1 In order to promote financial institutions to strengthen asset liquidity management, prevent potential payment risks and properly dispose of payment risks that have arisen, these measures are formulated in accordance with the People's Republic of China People's Bank of China Law, the People's Republic of China Company Law, the People's Republic of China Commercial Bank Law and other relevant laws and administrative regulations.

　　Article 2 The term "financial institutions" as used in these Measures refers to commercial banks, urban credit cooperatives and rural credit cooperatives that absorb deposits from the public.

Trust and investment companies, enterprise group finance companies, financial leasing companies and other non-bank financial institutions may refer to these measures for the prevention and disposal of payment risks.

　　Article 3 Financial institutions must abide by laws and regulations, operate prudently, strengthen the liquidity management of assets, and assume the responsibility of ensuring the payment of debts due.

　　Article 4 Branches of the People's Bank of China at all levels shall, in accordance with law, strengthen supervision over the liquidity of assets and the ability to pay of financial institutions within their jurisdiction, earnestly safeguard the legitimate rights and interests of depositors, and ensure the financial safety of one party.

Chapter II: Self-prevention and Mitigation of Payment Risks by Financial Institutions

　　Article 5 All financial institutions must implement organizational measures to prevent payment risks. The chairman of the asset-liability ratio management committee of all commercial banks shall be the president, and urban and rural credit cooperatives must set up an asset-liability ratio management group headed by the chairman or director to earnestly perform the duty of preventing payment risks. The analysis and evaluation of the liquidity and payment capacity of assets is the natural agenda of each meeting of the Asset-Liability Ratio Management Committee (Group).

　　Article 6 All financial institutions must strictly implement the regulations on the management of the ratio of assets and liabilities promulgated by the People's Bank of China to ensure the rational allocation of liabilities and assets in terms of duration. While honestly and timely reporting to the People's Bank of China on the implementation results of asset-liability ratio management, it is necessary to submit the "Payment Ability Calculation Form" (see annex) and the corresponding analysis report.

　　Article 7 All commercial banks must intensify the centralized allocation of funds by their head offices and improve the ability of unified allocation of funds within the system to ensure the payment of funds by their branches.

　　Article 8 All financial institutions must strictly enforce the financial and economic discipline of the state, strive to increase revenues and reduce expenditures, and control costs and expenses. "Rebates" and "benefit fees" shall not be paid to relevant units or individuals, and "kickbacks" and "benefit fees" shall not be illegally collected by staff, and all payments or receipts shall be recovered in accordance with the law; All kinds of unfair fund income obtained by the members of the board of directors (board of directors), senior management personnel, department heads and relevant staff members from the organization shall be returned.

　　Article 9 When a financial institution discovers signs of payment risk, it shall adjust the structure of assets and liabilities in a timely manner, including reducing the ratio of deposits and loans, selling the treasury bonds (or equity) it holds, selling fixed assets, requiring shareholders to make up the capital, and at the same time actively organizing funds, so as to improve the liquidity of assets and the ability to repay debts due.

　　Article 10 When a financial institution has a temporary payment risk, it must earnestly improve the quality of its services, properly negotiate with the creditors of the due debts, truthfully disclose to the creditors the determination and measures to resolve the payment risks, and strive to reach an agreement on deferred or installment payment. Creditors are allowed to convert some or all of their claims into equity.

　　Article 11 When a financial institution begins to have payment risks, it shall immediately convene a board of directors (council) meeting or a general meeting of shareholders (representatives) and notify the local branch of the People's Bank of China to send personnel to participate in studying and determining the self-rescue plan for payment risks. First of all, the shareholders should be asked to increase the amount of capital contribution. Loans or investments granted to shareholders, directors (directors), supervisors, managers, credit business personnel and their related persons, as well as loans, investments or loans issued to economic organizations that invest in these persons or hold senior management positions, shall be cleared, regardless of whether they are due or not. For the dismantling or deposit of interbank funds,

All will be cleared. At the same time, the unexpired creditor's rights can also be transferred to other financial institutions and the principal and legal interest of the creditor's rights can be recovered in a timely manner, and the two parties can sign an agreement to replace the corresponding creditor's rights contract. The same can be done for the transfer of investment equity.

　　Article 12 In the event of a dispute over over-the-counter payment of corporate bonds issued by a financial institution as an agent due to the failure of the issuing enterprise to allocate funds in accordance with the underwriting agreement, it shall immediately report to the local people's government and the local branch of the People's Bank of China, and the government shall coordinate with the bond issuer, the investor and the guarantor, as well as the agent issuer, and instruct the issuer or guarantor to raise funds or formulate a feasible repayment plan, reach an understanding with the investor, and settle the matter.

Chapter III: Monitoring and Relief of Payment Risks of Financial Institutions

　　Article 13 The branches of the People's Bank of China shall urge the financial institutions under their jurisdiction to promptly report the results of the implementation of the asset-liability ratio management and the payment capacity calculation table, and determine the corresponding payment risk status according to the various index values of the financial institution's asset-liability ratio management and the changes in the ability to pay.

　　Article 14 Where a branch of the People's Bank of China fails to meet the requirements of the People's Bank of China's off-site supervision indicators for the management of the asset-liability ratio of financial institutions within its jurisdiction, but does not have the circumstances provided for in Article 15 of these Measures and there is no payment gap, it shall be listed as the object of concern for payment risk, and shall promptly issue a "payment risk reminder" to it, requiring it to make timely rectification in accordance with the relevant provisions in Chapter II of these Measures.

　　Article 15 A branch of the People's Bank of China shall list a financial institution within its jurisdiction as the object of serious concern if there is a payment gap, or if there is no payment gap but has any of the following circumstances, and promptly issue a "payment risk warning" to it, requiring it to immediately report a report on the countermeasures to resolve the payment risk, and submit to the People's Bank of China on a monthly basis the implementation of the asset-liability ratio and the calculation table of the ability to pay.

　　(1) Closing balance of liquid assets and closing balance of liquid liabilities≤15%

　　(2) Reserve + reserve fund at the end of the period balance of deposits (excluding entrusted deposits) ≤13%

　　(3) The closing balance of non-performing loans: 30% of the closing balance of each loan ≥

　　(4) (Interbank Lending + Interbank Deposit) - (Interbank Lending + Interbank Deposit) The closing balance of each deposit (excluding entrusted deposits) ≥5%People's Bank of China local branches can further increase the content and frequency of required reports according to the risk level of the object of serious concern.

　　Article 16 A branch of the People's Bank of China shall immediately dispatch personnel to conduct on-site inspections of financial institutions that are listed as targets of serious concern and have large payment gaps. Among them, the inspection of urban commercial banks, urban credit cooperatives and their associations set up in urban areas shall be organized and carried out by the prefectural (city) or provincial-level branches of the People's Bank of China, and the inspection of county (city) commercial banks and urban and rural credit cooperatives in the county shall be organized and carried out by the county branches or prefectural (city) branches of the People's Bank of China. When conducting on-site inspections, branches of the People's Bank of China shall send written letters to the local government to request personnel from the auditing, finance, taxation, industry and commerce, and supervision departments to participate. The on-site inspection report shall be copied to the local people's government at the same time as it is submitted to the superior bank.

　　Article 17 For a financial institution with serious payment risks, if the leadership of the institution is weak, paralyzed, or has serious violations of laws and regulations, the local branch of the People's Bank of China shall instruct the institution to convene a general meeting of shareholders (representatives), elect the chairman of the board of directors (chairman) who meets the qualifications, appoint a new president (general manager, director), and designate a special person to supervise the financial institution to check debts, liquidate assets and verify rights and interests.

For the responsible persons suspected of violating the law and committing crimes found during the on-site inspection, the local government and relevant departments should be promptly notified by letter.

　　Article 18 Where a branch of the People's Bank of China reports a situation or complains to the People's Bank of China from a depositor of a financial institution within its jurisdiction, it shall give a warm reception and explain according to law, but shall not make promises or mislead "guaranteed repayment".

　　Article 19 When a branch of the People's Bank of China receives a request from a financial institution to coordinate the collection and withdrawal of funds, the provincial-level branch of the People's Bank of China shall organize and coordinate the funds from the provincial branch if the funds are borrowed in the province; If the borrower of the funds crosses provinces, the provincial-level branch of the People's Bank of China in the province where the borrower or the borrower is located shall jointly coordinate.

　　Article 20 With the approval of the head office of the People's Bank of China, a financial institution with a relatively serious degree of payment risk but no serious insolvency may be allowed to use the deposit reserve to pay a part of the small savings deposit or a larger amount of savings deposit when due. The local branch of the People's Bank of China shall implement special account management of the deposit reserves used by the institution and assign special personnel to supervise the payment.

　　Article 21 When payment risks arise in urban and rural credit cooperatives, upon approval by the prefectural and municipal branches of the People's Bank of China, their cooperatives may borrow funds through the lending market.

　　Article 22 For financial institutions that must provide liquidity support through re-lending by the People's Bank of China after the occurrence of payment risks, the provincial-level branches of the People's Bank of China shall propose a plan and submit it to the head office for approval.

　　Article 23 Where a financial institution has poor liquidity of assets or cannot recover its loans or investments on time due to the administrative intervention of the local government, the local government shall help the financial institution organize funds and increase its position. If the losses are caused, the local government shall make up for it at the expense of the local government.

　　Article 24 Where a financial institution has a serious payment risk, and the current leadership team is unable to perform its duty to resolve the risk and it is difficult to produce qualified members of the leadership team in a short period of time, the People's Bank of China may take over the institution. The creditor-debtor relationship of the financial institution being taken over does not change as a result of the receivership.

Chapter IV: Disposal of payment risks of non-salvable financial institutions

　　Article 25 For financial institutions with serious risk of payment crisis, insolvency, no hope of salvation, and small scale of assets and liabilities, the relevant financial institutions may be allowed to voluntarily merge or acquire, and after the rights and interests of the shareholders of the institution are written off, the merged or acquired financial institutions shall bear the corresponding creditor's rights and debts protected by law. The merger or acquisition of a financial institution shall be approved by the provincial branch of the People's Bank of China and reported to the head office for the record.

　　Article 26 The provincial-level branches of the People's Bank of China shall, after consultation with the local government, carry out administrative closure in accordance with the law, and designate the financial institutions for trusteeship and liquidation with the consent of the local government for financial institutions with serious risk of payment crisis, insolvency, serious violations of laws and regulations, and shareholders who are unable to bear losses or inject funds. The specific plan for the implementation of administrative closure shall be jointly proposed by the provincial branches of the People's Bank of China and local governments, and shall be submitted to the head office for approval.

The liquidated property of a closed financial institution shall be liquidated in the following order after payment of the liquidation costs:

(1) Wages and labor insurance fees owed to employees;

(2) the principal and lawful interest, compensation or payment insurance of personal savings deposits;

(3) Other debts.

　　Where the liquidation of assets is insufficient to pay off debts in the same order, it shall be distributed proportionally.

　　Article 27 For a financial institution with serious payment risk and insolvency, if the shareholder gives up the bailout, or after being administratively closed down by the People's Bank of China, finds that its assets are insufficient to pay off its debts, and the creditor does not agree to mediation, it may apply to the people's court for bankruptcy with the consent of the People's Bank of China.

Chapter V: Supplementary Provisions

　　Article 28 A branch of the People's Bank of China shall, after handling the payment risks of financial institutions, form special dossiers. Among them, for those disposed of by way of receivership, merger, closure and bankruptcy, they should be copied and bound into a book and reported to the head office for the record.

　　Article 29 The senior management personnel of financial institutions with serious payment risks shall be recorded in their qualification files according to their responsibilities. Those who are directly responsible for the risk posed, whether or not they constitute an offence, should be declared to be barred from financial institutions for a certain period of time or for life. It is strictly forbidden to hire any financial institution during the ban period.

The local branch of the People's Bank of China may recommend that the senior management personnel of financial institutions who do not cause payment risks during their tenure of office, promptly and truthfully report the payment risks to the People's Bank of China, closely cooperate with the supervision work of the People's Bank of China, and make outstanding contributions to the resolution of payment risks, and record them in their qualification files.

　　Article 30 Each provincial-level branch of the People's Bank of China may, in accordance with these Interim Measures, formulate opinions on the disposal of classified payment risks in light of the types, characteristics, risk levels and manifestations of each financial institution within its jurisdiction.

　　Article 31 These Measures shall come into force on March 1, 1998.

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