(Unofficial Translation)
(2003-12-27)
Adopted at the 3rd Session of the 8thNational People's Congress on March 18, 1995, and amended in accordance withthe "Decision to Amend the Law of the People's Republic of China on thePeople's Bank of China" made at the 6th meeting of the StandingCommittee of the 10th National People's Congress on December 27,2003
Chapter I General Provisions
Article 1 This Law is enacted in order to definethe status and functions of the People's Bank of China, ensure the correctformulation and implementation of monetary policy, establish and improve the macroeconomicmanagement system of the central bank and maintain financial stability.
Article 2 The People's Bank of China is thecentral bank of the People's Republic of China. The People's Bank of Chinashall, under the leadership of the State Council, formulate and implementmonetary policy, prevent and mitigate financial risks, and maintain financialstability.
Article 3 The objective of the monetary policy is tomaintain the stability of the value of the currency and thereby promoteeconomic growth.
Article 4 The People's Bank of China assumes thefollowing functions:
(1) Promulgate decrees, rules and regulations thatare related to fulfilling its functions;
(2) Formulate and implement monetary policy inaccordance with law;
(3) Issue the currency and administer itscirculation;
(4) Regulate and supervise the inter-bank lendingmarket and the inter-bank bond market;
(5) Execute foreign exchange administration, regulateand supervise the inter-bank foreign exchange market;
(6) Regulate and supervise the gold market;
(7) Hold, administer and manage the state foreignexchange reserves and gold reserves;
(8) Manage the State treasury;
(9) Ensure normal operation of the payment andsettlement systems;
(10) Guide and arrange anti-money laundering work inthe financial sector and monitor of fund movement for anti-money launderingpurpose;
(11) Conduct statistics, survey, analysis andforecasts of the financial industry;
(12) Participate in related international financial activitiesin the capacity of the central bank of the State;
(13) Perform other functions assigned by the StateCouncil.
To implement monetary policy, the People's Bank ofChina may engage in financial operations in accordance with the relevantprovisions of Chapter Ⅳ of this Law.
Article 5 The People's Bank of China shall reportto the State Council its decisions concerning annual monetary supply, interestrate, exchange rate and other important issues specified by the State Councilfor approval before they are implemented.
The People's Bank of China may, on its own, make andput into immediate effect decisions on other monetary policy issues other thanthose specified in the preceding paragraph, provided it reports to the StateCouncil for record.
Article 6 The People's Bank of China shall submitwork reports to the Standing Committee of the National People's Congress on monetarypolicy and performance of the financial sector.
Article 7 The People's Bank of China shall, underthe leadership of the State Council, independently implement monetary policy,perform its functions and carry out its business operations according to lawand be free from intervention by local governments, government departments atvarious levels, non-governmental organizations and individuals.
Article 8 All capital of the People's Bank ofChina is funded by the State and owned by the State.
Article 9 The State Council shall establish acoordinating mechanism for financial supervision and regulation. The details ofthe mechanism shall be determined by the State Council.
Chapter Ⅱ
Article 10 The People's Bank of China shall have oneGovernor and a certain number of Deputy Governors. The the Governor of thePeople's Bank of China shall be nominated by the Premier of the State Counciland decided by the National People's Congress. When the National People'sCongress is in adjournment, the Governor shall be decided by the StandingCommittee of the National People's Congress and appointed or removed by thePresident of the People's Republic of China. The Deputy Governors of thePeople's Bank of China shall be appointed or removed by the Premier of theState Council.
Article 11 The People's Bank of China adopts a governoraccountability system. The Governor shall be the chief officer of the People'sBank of China, while the Deputy Governors shall assist the Governor infulfilling his or her duty.
Article 12 The People's Bank of China is to establisha monetary policy committee, whose responsibilities, composition and workingprocedures shall be prescribed by the State Council and reported to theStanding Committee of the National People's Congress for record.
The Monetary Policy Committee shall play an importantrole in macroeconomic management as well as in the formulation and adjustmentof the monetary policy.
Article 13 The People's Bank of China shallestablish branch offices as its representative organs in light of the need toperform its functions, and shall administer these branch offices on a centralizedbasis.
The branch offices of the People's Bank of Chinashall, as authorized by the People's Bank of China, undertake to maintainfinancial stability in their respective jurisdictions and conduct relevantbusiness operations.
Article 14 The Governor, Deputy Governors and otheremployees of the People's Bank of China shall faithfully fulfill their dutiesand shall not abuse their power or seek illegitimate personal gains. They shallnot assume positions in any other financial institutions, enterprises orfoundations.
Article 15 The Governor, Deputy Governors and otheremployees of the People's Bank of China shall protect the State secrets and thesecrets of the financial institutions and parties obtained in performing thefunctions of the People's Bank of China.
Chapter Ⅲ
Article 16 The legal tender of the People'sRepublic of China is the Reminbi. No institution or individual shall reject therenminbi as a medium of payment for any public or private debts within the territoryof the People's Republic of China.
Article 17 The unit of the renminbi is yuan and thefractional units of the Renminbi are Jiao and Fen.
Article 18 The renminbi shall be printed andissued solely by the People's Bank of China.
When issuing a new edition of the renminbi, thePeople's Bank of China shall make known to the public the issuing date, facevalues, designs, patterns and specifications.
Article 19 It is prohibited to counterfeitor alter the renminbi. It is prohibited to sell or purchase counterfeit andaltered renminbi. It is prohibited to transport, hold or use counterfeit andaltered renminbi. It is prohibited to deliberately destroy or damage therenminbi. It is prohibited to illegally use images of the renminbi in advertisement,publications or other commodities.
Article 20 No institutions or individuals mayprint or issue substitute money to replace the renminbi in market circulation.
Article 21 The damaged renminbi shall be exchangedin accordance with the regulations of the People's Bank of China, and shall berecalled and destroyed by the People's Bank of China.
Article 22 The People's Bank of China shallestablish a renminbi issue vault and shall establish subsidiary issue vaults atits branch offices. The subsidiary issue vaults shall, in allocating renminbi'sissue fund, act on the order of allocation from their superior vault. Noinstitutions or individuals may use the issue fund in violation of regulations.
Chapter Ⅳ
Article 23 To implement monetary policy, thePeople's Bank of China may apply the following monetary policy instruments:
(1) Require banking institutions to place depositreserves at a given ratio;
(2) Determine the benchmark interest rate of thecentral bank;
(3) Conduct rediscount for banking financialinstitutions with accounts in the People's Bank of China;
(4) Provide lending to commercial banks;
(5) Trade treasury bonds, other governmentsecurities, financial bonds and foreign exchange on the open market;
(6) Other monetary policy instruments specified bythe State Council.
When applying the above-mentioned monetary policyinstruments to implement monetary policy, The People's Bank of China mayformulate detailed conditions and procedures.
Article 24 The People's Bank of China shall managethe state treasury in accordance with laws, administrative rules andregulations.
Article 25 The People's Bank of China may, onbehalf of the fiscal authorities under the State Council, issue and redeem treasurybonds and other government securities to financial institutions.
Article 26 The People's Bank of China may openaccounts for banking financial institution as needed, but may not provideoverdraft for these accounts.
Article 27 The People's Bank of China shallorganize or assist in organizing a clearing system among banking financialinstitutions, coordinate clearing arrangements among them and provide clearingservice. The detailed rules shall be formulated by the People's Bank of China.
The People's Bank of China shall formulate rules onpayment and settlement together with the banking regulatory authority under theState Council.
Article 28 The People's Bank of China may, asneeded in its monetary policy implementation, decide on the amount, maturity,interest rate and modality of its lending to the commercial banks. The maturityof such lending shall not be longer than one year.
Article 29 The People's Bank of China shall not provideoverdraft for government or directly subscribe to or underwrite treasury bonds andother government securities.
Article 30 The People's Bank of China shall notlend to local governments and government agencies at various levels, or tonon-bank financial institutions, other organizations and individuals. However,in exceptional cases, it may lend to non-bank financial institutions deemedeligible by the State Council for such lending.
The People's Bank of China shall not provideguarantee for any institutions or individuals.
Chapter Ⅴ
Article 31 The People's Bank of China shall, inaccordance with law, monitor and regulate developments of thefinancial markets so as to promote their coordinated development.
Article 32 The People's Bank of China may conductsupervision and examination on following activities of the financialinstitutions, other institutions and individuals:
(1) Compliance with regulatory rules on reserverequirement;
(2) Activities relating to special lending of thePeople's Bank of China;
(3) Compliance with regulatory rules on the Renminbi;
(4) Compliance with regulatory rules on theinter-bank lending market and inter-bank bond market;
(5) Compliance with foreign exchange regulations;
(6) Compliance with regulatory rules on gold;
(7) act as fiscal agent on behalf of the People'sBank of China;
(8) Compliance with clearing and settlementregulations; and
(9) Compliance with anti-money laundering regulations.
The above-mentioned special lending of the People'sBank of China refers to loans extended by the People's Bank of China, uponapproval of the State Council, to financial institutions for specified uses.
Article 33 When the People's Bank of China deemsit necessary for implementing monetary policy and maintaining financialstability, the banking regulatory authority under the State Council may requestto conduct supervisory examinations on banking financial institutions. Thebanking regulatory authority shall respond within 30 days after receiving sucha request.
Article 34 Wherebanking financial institutions have payment difficulties that may triggerfinancial risks, the People's Bank of China may, with the approval of the StateCouncil, conduct examination and supervision on such institutions so as tomaintain financial stability.
Article 35 ThePeople's Bank of China may require banking financial institutions to submitbalance sheets, income statements and other financial statements, andstatistical data and information as needed for performing its functions.
The People's Bank of China shall establish asupervisory information sharing system together with the banking regulatoryauthority and other financial supervisory authorities under the State Council.
Article 36 ThePeople's Bank of China is responsible for the compilation of consolidatedstatistical data and reports of the financial industry and disclose them to thepublic in accordance with relevant regulations of the State.
Article 37 ThePeople's Bank of China shall establish and improve the internal audit andexamination system and strengthen its internal control.
Chapter Ⅵ
Article 38 ThePeople's Bank of China shall have an independent budget arrangement.
Its budget shall be reviewed by the fiscal authorityand become part of the central government budget. Its execution is subject tothe supervision of the fiscal authority under the State Council.
Article 39 The People's Bank of Chinasurrender to the central budget its net profit each accounting year aftermaking general provisions at a level set by the fiscal authority.
Losses of the People's Bank of China shall be coveredby fiscal appropriation from the central budget.
Article 40 The receipts and payments offunds and accounting practice of the People's Bank of China shall comply withlaws, administrative rules and regulations and the State's unified accounting standards,and be subjected to separate auditing and supervision in accordance with law bythe auditing and the fiscal authorities under the State Council respectively.
Article 41 ThePeople's Bank of China shall, within three months after the end of eachaccounting year, compile its balance sheet, income statement and relevantfinancial statements, prepare its annual report and publish them in accordancewith relevant regulations of the State.
The accounting year of the People's Bank of Chinabegins on the first day of January and ends on the thirty-first day of Decemberof the Gregorian calendar.
Chapter Ⅶ
Article 42 Anyone who counterfeits or alters therenminbi or sells counterfeit or altered renminbi, or knowingly transportscounterfeit renminbi, if already constituting a crime, shall be liable tocriminal prosecution. If the case is not so serious as to constitute a crime,he or she shall be put in detention of no more than 15 days and fined no morethan 10,000 yuan by a public security organ.
Article 43 Anyone who buys counterfeit oraltered Renminbi or knowingly holds or uses counterfeit or altered Renminbi, ifalready constituting a crime, shall be investigated for criminalresponsibility. If the case is not so serious as to constitute a crime, he or sheshall be put in detention of no more than 15 days and fined no more than 10,000yuan by a public security organ.
Article 44 If anyone illegally uses theimages of Renminbi in advertisement, publications or other commodities, thePeople's Bank of China shall order a correction destroy the illegally usedimages of Renminbi, confiscate the illegal gains and impose a fine of no morethan 50,000 yuan.
Article 45 Ifanyone prints or sells notes as substitute for renminbi in market circulation,the People's Bank of China shall order a cease to the illegal activity andimpose a fine of no more than 200,000 yuan.
Article 46 In case of non-compliance underArticle 32, where there are penalties indicated in relevant laws andregulations, a punishment shall be imposed accordingly. If there are nopenalties indicated in these laws and regulations, the People's Bank of Chinais to execute a range of punishment according to the severity of each case. Thepunishments include issuing a warning, confiscating illegal gains, imposing afine of no less than one time but no more than five times of the value ofillegal gains in the case of such gains exceeding 500,000 yuan, or a fine of500,000 yuan to 2,000,000 yuan in the case of no illegal gains or such gainsare less than 500,000 yuan. Directors, senior management or other parties directlyresponsible for the misconduct shall be warned and fined 50,000 to 500,000 yuan.If the case constitutes a crime, a criminal prosecution shall be staged.
Article 47 If any involved party refuses toaccept the administrative punishment, he or she may file an administrative appealin accordance with the "Law of the People's Republic of China onAdministrative Appeal".
Article 48 If the People's Bank of Chinacommits any of the following acts, the managers and other persons directlyresponsible for the misconduct shall be subject to administrative sanctionsaccording to law, whereas the case constitutes a crime, the offenders shall beinvestigated for criminal responsibility according to law:
(1) Providing lending in violation of the provisionsin the first paragraph of Article 30;
(2) Providing guarantee for an institution orindividual; and
(3) Unauthorized use of the renminbi issue fund.
If any of the acts specified above results in losses,the managers and other persons directly responsible shall be liable to partialor full compensation of the losses.
Article 49 If a local government, agovernment department at any level, a public organization or an individual forcesthe People's Bank of China or its employees to provide a loan or a guarantee inviolation of the provisions in Article 30, the managers and other personsdirectly responsible for the misconduct shall be subject to administrativesanctions in accordance with the law. If the case constitutes a crime, theoffenders shall be investigated for criminal responsibility according to law.If losses are incurred, the offenders shall be liable to partial or fullcompensation of the losses.
Article 50 Any employee of the People's Bankof China who divulges State secrets or commercial secrets shall be liable tocriminal prosecution, if the case constitutes a crime; or to administrativesanctions if the case is not so serious as to constitute a crime.
Article 51 Any employee of the People's Bankof China who accepts bribes, to seeks illegitimate personal gains, abuses hisor her power and neglects his or her duty shall be liable to criminalprosecution, if the case constitutes a crime; or to administrative sanctions ifthe case is not so serious as to constitute a crime.
Chapter Ⅷ
Article 52 Bankingfinancial institutions in this Law refer to deposit-taking financialinstitutions, including commercial banks, urban credit cooperatives and ruralcredit cooperatives, and policy banks that are incorporated within theterritory of the People's Republic of China.
Provisions in this Law regarding banking financialinstitutions are also applicable to financial asset management companies, trustand investment companies, finance companies and financial leasing companies andother financial institutions approved by the banking regulatory authority underthe State Council that are incorporated within the territory of the People's Republicof China.
Article 53 ThisLaw takes effects on the date of promulgation.
