Chinese lawmakers review draft revision to banking supervision and regulation law

BEIJING -- Chinese lawmakers have begun reviewing a draft revision to the nation's banking supervision and regulation law, with an eye to improving regulatory measures and enhancing the protection of consumer rights and interests.

Reflecting a "penetrative" approach, the draft seeks to expand the scope of regulation from banking institutions to their major shareholders and actual controllers. It also imposes requirements on their entry qualifications and capital contribution obligations, aiming to crack down on violations such as non-compliant related-party transactions and the illegal withdrawal of capital contributions.

Cong Lin, deputy head of the National Financial Regulatory Administration, said that the current law on banking supervision and regulation, which was implemented in 2004, needs to be revised due to new circumstances and problems that have emerged alongside the banking sector's rapid development in recent years.

Cong said the draft revision aims to address prominent issues such as incomplete regulation coverage, insufficient regulatory measures and an inadequate risk disposal mechanism. By strengthening legal responsibilities, it also seeks to increase the severity of penalties for illegal acts in order to raise the cost of violations and create a powerful deterrent.

In strengthening the protection of consumer rights and interests, the revision seeks to strengthen the management of banking industry practitioners, intensify personal information protection, and prohibit practices that infringe upon clients' rights and interests, such as false advertising or improper fees.