CBRC General Office Notice on Further Strengthening the Construction of Integrity in the Banking System

General Office of the CBRC Notice on Further Strengthening the Construction of Integrity in the Banking System

China Banking Regulatory Commission

General Office of the CBRC Notice n. 89 [2016]

To all CBRCs, all policy banks, all large banks, all joint-stock banks, all postal savings banks, all foreign all banks, financial asset management companies, and other financial institutions:

In order to carry out the strategic deployment of the Central Party Committee and the State Council on accelerating the construction of a social credit system, and comprehensively implementing the “Planning Outline on the Construction of a Social Credit System (2014-2020)”, support and promote the construction of social credit system, supervise and guide the banking industry to raise credit level and strengthen the construction of integrity, relevant matters are hereby notified:

I. Deepen promotion of credit information disclosure and sharing

(1) Supervision institutions at all levels should conscientiously implement relevant provisions of the “People’s Republic of China Regulations on Open Government Information”, “Provisional Regulations on Enterprise Information Publicity”, improve systems requirements and management systems, continue to promote government information disclosure, broaden public participation channels in government decision-making, constantly enhance the transparency and credibility of supervision work.Publicity and disclosure of credit information in administrative affairs shall be further strengthened, in accordance with relevant requirements of the work of the ‘double publicity’, information about administrative licenses and administrative punishments shall be promptly disclosed to the public through official websites.

(2) Supervision institutions at all levels should constantly improve the rules and regulations on the collection, collation, preservation and sharing of government credit information, and actively promote the interconnection and sharing of information on administrative licensing and administrative punishment.In the case of administrative decisions made by accounting authorities, relevant departments shall submit information about administrative licenses and administrative punishments for the previous quarter to relevant departments of the CBRC’s responsible for constructing the social credit system, within 10 working days after the quarter for disclosure on official websites. Among them, information on licenses shall be provided by departments for institutional supervision, information about punishments shall be provided by legal departments, and its specific content and format shall be consistent with information published on official websites. After information has been consolidated, relevant departments shall upload the above mentioned information on the National Credit Information Sharing Platform and on the “Credit China” website, to realize sharing of information with relevant ministries. For administrative decisions made by the CBRC, each CBRC shall strengthen communication and coordination with local governments, promote the establishment of a mechanism to collect and share information on administrative licensing and administrative punishments, and submit the above mentioned information to local system platforms on a regular basis.Supervision institutions at all levels shall study and build credit information databases, collect and integrate all kinds of credit information generated in daily supervision work, establish corresponding credit records and realize electronic storage.

II. Do a good work of jointly punishing dishonest behavior

(3) Supervision institutions at all levels should earnestly implement the Memorandum of Understanding signed by the CBRC, the General Administration for Commerce and Industry, the General Administration of Taxation, the Supreme People’s Court and other units, and effectively implement joint disciplinary measures for breaches of trust.In establishing institutions, the appointment of senior executives and other market access work, credit information shared by all ministries shall be queried through the intranet information disclosure system of the CBRC intranet, and necessary limitations on the application for market entry of subjects who have breached trust shall be adopted in accordance with the work requirements of joint punishment. The status of joint punishment work shall be regularly summarized, and the status of the use of credit information in the work of allowing market access during the previous quarter shall be submitted to CBRC departments responsibile for the construction of a social credit system within 10 working days after the end of the quarter.

(4) The CBRC should support and promote the construction of social integrity system in local areas, and actively cooperate with local development, industry and commerce, taxation, judicial and other departments, strengthen the coordination of supervision and information exchange, explore the construction of credit rewards and punishment linkage mechanism, effective implementation of voluntary services, customs supervision, tax collection and management in areas such as the joint incentives, as well as the court enforcement, Food and drug, safety, environmental protection, railway operations and other areas of the joint punishment system for breaches of trust.

(5) Banking and financial institutions should attach great importance to the construction of a social credit system, and cooperate in the joint punishment of conducts breaching trust.During the process of credit approval, such channels as the information disclosure system of the CBRC, the “Credit China” website must be used to query and download relevant credit information, to be used as an important reference in credit decision-making and risk management. A strict review and assessment shall be conducted on applications to obtain letters of credit by a subject who has breached trust, or to provide credit guarantees on behalf of the borrower on loan applications.

III. Accelerate the construction of integrity in the banking industry

(6) Banking and financial institutions shall take integrity services, keeping one’s words and maintaining promises as important aspects of their own business development and of corporate governance. They shall conscientiously strengthen organizational leadership, uninterruptedly improve management systems, and overall promote the construction of integrity. Each banking and financial institution shall establish a leading group for the construction of integrity within its institution, which shall be headed by a senior manager, to guide and coordinate relevant work. The leading department responsible for organizing and promoting each aspect of the work of the construction of integrity must be specified. The status of the construction of integrity must be integrated into assessment and evaluation systems. All lines of business and all branch institutions shall be supervised and urged to organize in-depth integrity management, to maintain and create a good environment for market credit, and establish a good image of the banking sector.

(7) Banking institutions should strengthen service awareness, optimize the quality of service, and effectively protect consumers’ rights and interests.Information about products and services promoted to consumers, and to services in the same industry as well as intermediary services and other cooperating institutions shall be true and complete, and should not contain false advertising. The duty to provide truthful information must be strictly implemented, consumer choice shall be respected, consumers wish must not be violated by tying the sale of products and services, and by attaching other unreasonable conditions. Work processes shall be open, contracts and agreements shall be honestly fulfilled, credit level shall be raised. Consumers must be fairly treated, and the emergence of discriminatory products and services must be prevented. Sales and the management of business distribution must be standardized, the financial products sales zone management system must be strictly implemented. Requirements relevant to the ‘double record’ for product sales in sales zones shall be diligently implemented, to eliminate false promises, misleading sales and fraudulent marketing.

(8) Banking and financial institutions must further strengthen information disclosure, and they shall make timely announcements to the public through various channels about major issues in business development, adjustments to business services, new product listings, and other information. Audit financial reports must be issued regularly, and it should be ensured that their content is accurate. The level of public opinion management should be raised, and social concerns should be proactively given voice, and actively responded to.

IV. Strengthen the management and use of credit information

(9) Banking and financial institutions should turn the management and use of credit information into an important means to prevent and control credit risk. They should continuously strengthen systems construction, systems support, and incentive constraints. Regulatory systems on such aspects as the collection, processing, maintenance and use of credit information shall be improved, information management shall be standardized, and the level of refinement shall be improved.Information systems support and guarantees must be further strengthened, automation of credit information processing and use shall be improved.A corresponding incentive and punishment mechanism shall be established, to promote credit information management application system requirements.

(10) Banking and financial institutions should make full use of credit information service platform such as the “Credit China” website, strengthen exchanges and cooperation with credit rating agencies, collect and organize various kinds of credit information resources through various channels, establish complete credit records for credit customers through processing and integration, and accurately grasp customers ‘ status and risk level.

(11) Banking and financial institutions should explore the use of advanced concepts and technologies such as big data, and constantly deepen the analysis and mining of credit information resources.The application of credit information analysis should be carried out in all aspects of credit management, the level of risk management should effectively be improved, and the work of credit rating, qualification evaluation and risk warning should be supported.

(12) Banking and financial institutions should collect and collate all kinds of information on financial breach of credit, including loan fraud, illegal fund-raising, fraud on financial instruments, credit fraud, credit card fraud, evasion of repayment of bank loans, etc. compile corresponding model cases, and promptly report them to supervisory institutions.Supervision departments at all levels should establish and perfect exchange and cooperation mechanisms with public security organs, procuratorates, and courts. They should share information on breaches of trust, effectively carry out joint punishments, prevent financial fraud and the evasion of repayment of bank loans, and jointly safeguard the security of financial assets.

Integrity construction work in non-bank financial institutions shall be carried out with reference to this notice.

May 6, 2016.

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