(Order of the State Council of the People's Republic of China No. 660)
The Deposit Insurance Regulation, as adopted at the 67th executive meeting of the State Council on October 29, 2014, is hereby issued, and shall come into force on May 1, 2015.
Premier Li Keqiang
February 17, 2015
Article 1 This Regulation is developed to establish and regulate the deposit insurance system, protect the lawful rights and interests of depositors according to the law, timely prevent and eliminate financial risks, and maintain financial stability.
Article 2 Commercial banks, rural cooperative banks, rural credit cooperatives, and other deposit-taking banking financial institutions formed within the territory of the People's Republic of China (hereinafter collectively referred to as “institutional policyholders”) shall buy deposit insurance under this Regulation.
Institutional policyholders' branch offices outside the territory of the People's Republic of China and foreign banks' branch offices within the territory of the People's Republic of China shall not be governed by the preceding paragraph, unless there are other arrangements between the People's Republic of China and the country or region concerned regarding the deposit insurance system.
Article 3 For the purpose of this Regulation, the term “deposit insurance” means the system under which institutional policyholders pay insurance premiums to the deposit insurance fund management institution, forming a deposit insurance fund, and the deposit insurance fund management institution pays the insured deposits to depositors and take necessary measures to maintain the safety of deposits and the deposit insurance fund.
Article 4 Insured deposits include the RMB deposits and foreign currency deposits taken by institutional policyholders, except the interbank deposits of financial institutions, deposits of the senior executives of institutional policyholders in their own institutions, and other deposits which shall not be insured as prescribed by the deposit insurance fund management institution.
Article 5 Deposit insurance has a coverage limit, and the maximum amount of coverage is 500,000 yuan. The People's Bank of China (“PBC”) may, together with relevant departments under the State Council, adjust the maximum amount of coverage in view of factors such as economic situation, changes in the deposit structure, and financial risk status, but shall submit it to the State Council for approval before publication and implementation.
If the amount of principal and interest of deposits in all insured deposit accounts owned by the same depositor at the same institutional policyholder is less than the maximum amount of coverage, the deposits shall be paid in full. The portion in excess of the maximum amount of coverage shall be paid with the liquidated property of the institutional policyholder.
Upon paying the insured deposits of a depositor, the deposit insurance fund management institution acquires the depositor's claim against the institutional policyholder in the same order of liquidation.
The measures for payment of the deposits of the social insurance fund and the housing provident fund shall be separately developed by the PBC and relevant departments under the State Council and be submitted to the State Council for approval.
Article 6 The sources of the deposit insurance fund include:
(1) Insurance premiums paid by institutional policyholders.
(2) Property distributed in the liquidation of institutional policyholders.
(3) Proceeds gained in the use of the deposit insurance fund by the deposit insurance fund management institution.
(4) Other legal income.
Article 7 The deposit insurance fund management institution shall perform the following duties:
(1) Developing and publishing rules relating to its performance of duties.
(2) Developing and adjusting deposit insurance rates and submitting them to the State Council for approval.
(3) Determining the insurance rates applicable to each institutional policyholder.
(4) Collecting insurance premiums.
(5) Managing and using the deposit insurance fund.
(6) Taking early corrective actions and risk disposal measures under this Regulation.
(7) Paying the insured deposits of depositors in time within the limit set by this Regulation.
(8) Other duties approved by the State Council.
The deposit insurance fund management institution shall be decided by the State Council.
Article 8 The deposit-taking banking financial institutions that have opened for business before the implementation of this Regulation shall undergo the insurance formalities within the time limit prescribed by the deposit insurance fund management institution.
The deposit-taking banking financial institutions that open for business after the implementation of this Regulation shall undergo the insurance formalities according to the rules of the deposit insurance fund management institution within six months after obtaining business licenses from the administrative departments for industry and commerce.
Article 9 The insurance rates of deposits are comprised of standard rates and risk-based differential rates. The standard rates shall be determined and adjusted by the deposit insurance fund management institution on the basis of factors such as economic and financial situation, deposit structure, and accumulation of the deposit insurance fund and shall be submitted to the State Council for approval before implementation.
The insurance rates applicable to each institutional policyholder shall be determined by the deposit insurance fund management institution on the basis of factors such as the operation and management situation and risk status of each institutional policyholder.
Article 10 The insurance premium payable by an institutional policyholder shall be calculated on the basis of the insured deposits of the institutional policyholder and the applicable insurance rates determined by the deposit insurance fund management institution. The specific measures shall be prescribed by the deposit insurance fund management institution.
An institutional policyholder shall file the balance of insured deposits, the deposit structure, and other necessary materials about the determination of applicable insurance rates, the calculation of insurance premium, and the payment of deposits on a regular basis according to the requirements of the deposit insurance fund management institution.
An institutional policyholder shall pay insurance premium once every six months according to the rules of the deposit insurance fund management institution.
Article 11 The use of the deposit insurance fund shall follow the principles of safety, liquidity, and maintenance and appreciation of value and be limited to the following forms:
(1) Deposits in the PBC.
(2) Investments in government bonds, central bank bills, financial bonds with relatively high credit ratings, and other high-grade bonds.
(3) Other fund utilization forms approved by the State Council.
Article 12 The deposit insurance fund management institution shall, within three months upon the end of each fiscal year, prepare financial and accounting reports or statements of the receipts and payments of the deposit insurance fund, prepare an annual report, and announce them in accordance with relevant provisions of the state.
The receipts and payments of the deposit insurance fund shall comply with the uniform financial and accounting rules of the state and be subject to the audit supervision of the audit organ.
Article 13 Upon discovering any of the following circumstances in the course of performing duties, the deposit insurance fund management institution may conduct an inspection:
(1) Where any change in the risk status of an institutional policyholder is likely to result in the necessity to adjust the insurance rates against it, inspecting relevant matters concerned in the calculation of insurance rates.
(2) Where the premium base of an institutional policyholder is likely to be doubtful, inspecting the size, structure, and veracity of its deposits.
(3) Inspecting the veracity of the information and materials filed by an institutional policyholder.
If any major problem is discovered in the course of inspection, the deposit insurance fund management institution shall report it to the banking regulatory authority.
Article 14 The deposit insurance fund management institution shall participate in the coordination mechanism for financial supervision and administration and shall establish information sharing mechanisms with the PBC, the banking regulatory authority, and other financial regulatory departments or institutions.
The deposit insurance fund management institution shall acquire the risk status, inspection reports, credit ratings, and other regulatory information of institutional policyholders through information sharing mechanisms.
Where the information mentioned in the preceding paragraph cannot meet the needs for controlling risks associated with the deposit insurance fund, ensuring timely payments, and determining differential rates, the deposit insurance fund management institution may require institutional policyholders to file other relevant information in a timely manner.
Article 15 When discovering that an institutional policyholder is undercapitalized or under any other circumstance that endangers the safety of deposits and the deposit insurance fund, the deposit insurance fund management institution may issue a risk alert to it.
Article 16 Where the capital adequacy ratio of an institutional policyholder drops sharply due to reasons such as a major asset loss, which seriously endangers the safety of deposits and the deposit insurance fund, the institutional policyholder shall timely take measures such as replenishing capital, controlling asset growth, controlling credit granting in major transactions, and reducing leverage ratio according to the requirements of the deposit insurance fund management institution, the PBC and the banking regulatory authority.
Where an institutional policyholder is under the circumstance mentioned in the preceding paragraph and fails to improve within the time limit given by the deposit insurance fund management institution, the deposit insurance fund management institution may raise the insurance rates against it.
Article 17 Upon discovering that an institutional policyholder is under the circumstance mentioned in Article 38 or 39 of the Banking Supervision Law of the People's Republic of China , the deposit insurance fund management institution may suggest the banking regulatory authority that it may take corresponding measures according to the law.
Article 18 The deposit insurance fund management institution may use the deposit insurance fund by the following methods to protect the interests of depositors:
(1) Directly paying insured deposits within the limit set by this Regulation.
(2) Engaging other qualified institutional policyholders to pay insured deposits for it within the limit set by this Regulation.
(3) Providing guarantee, loss sharing or financial support for other qualified institutional policyholders to facilitate their acquisition or assumption of all or part of the businesses, assets, and liabilities of institutional policyholders to be taken over or cancelled or applying for bankruptcy.
The deposit insurance fund management institution shall follow the cost minimization principle for use of the fund when making the deposit insurance fund use plan and selecting one of the methods mentioned in the preceding paragraph.
Article 19 Under any of the following circumstances, a depositor shall have the right to request the deposit insurance fund management institution to, within the limit set by this Regulation, use the deposit insurance fund to pay the depositor's insured deposits:
(1) The deposit insurance fund management institution serves as the organization to take over institutional policyholders.
(2) The deposit insurance fund management institution conducts liquidation of canceled institutional policyholders.
(3) The people's court decides on and accepts the bankruptcy applications of institutional policyholders.
(4) Other circumstances approved by the State Council.
The deposit insurance fund management institution shall, under this Regulation, fully pay deposits within seven working days as of the day when the circumstance mentioned in the preceding paragraph occurs.
Article 20 Where a staff member of the deposit insurance fund management institution has any of the following conduct, a sanction shall be imposed according to the law:
(1) Collecting insurance premiums in violation of rules.
(2) Using the deposit insurance fund in violation of rules.
(3) Violating rules by failing to timely and fully pay deposits.
Where a staff member of the deposit insurance fund management institution abuses powers, neglects duties, or divulges any state secret or any trade secret he or she has access to, a sanction shall be imposed according to the law; if any crime is constituted, he or she shall be subject to criminal liability according to the law.
Article 21 Where an institutional policyholder is under any of the following circumstances, the deposit insurance fund management institution shall order it to make correction within a certain time limit; if it fails to make correction within the prescribed time or if the circumstances are serious, a record shall be kept and be taken as basis for adjusting the insurance rates applicable to it:
(1) Failing to buy insurance according to the law.
(2) Failing to timely and fully pay insurance premiums according to the law.
(3) Failing to file information or materials as required or filing any false information or materials.
(4) Refusing or obstructing an inspection lawfully conducted by the deposit insurance fund management institution.
(5) Obstructing the deposit insurance fund management institution's implementation of the deposit insurance fund use plan.
Where an institutional policyholder is under any of the circumstances specified in the preceding paragraph, the deposit insurance fund management institution may announce the chief person in charge and directly liable persons of the institutional policyholder. Under the circumstance of item (2) of the preceding paragraph, the deposit insurance fund management institution may also charge a penalty fee of 0.05% of the unpaid insurance premiums on a daily basis.
Article 22 Deposit-taking banking financial institutions which the banking regulatory authority under the State Council has decided to take over or cancel according to the law or whose bankruptcy applications have been accepted by people's courts before the implementation of this Regulation shall not be governed by this Regulation.
Article 23 This Regulation comes into force on May 1, 2015.
