(Unofficial
Translation)
Law of the People's Republic of China on the People's Bank of China
(2003-12-27)
Adopted
at the 3rd Session of the 8th National People's Congress on March 18, 1995, and
amended in accordance with the "Decision to Amend the Law of the People's
Republic of China on the People's Bank of China" made at the 6th meeting
of the Standing Committee of the 10th National People's Congress on December
27, 2003
Chapter I General Provisions
Article 1 This Law is enacted in order to define the status and functions of
the People's Bank of China, ensure the correct formulation and implementation
of monetary policy, establish and improve the macroeconomic management system
of the central bank and maintain financial stability.
Article 2 The People's Bank of China is the central bank of the People's
Republic of China. The People's Bank of China
shall, under the leadership of the State Council, formulate and implement
monetary policy, prevent and mitigate financial risks, and maintain financial
stability.
Article 3 The objective of the monetary policy is to maintain the stability of
the value of the currency and thereby promote economic growth.
Article 4 The People's Bank of China assumes the following functions:
(1)
Promulgate decrees, rules and regulations that are related to fulfilling its
functions;
(2)
Formulate and implement monetary policy in accordance with law;
(3)
Issue the currency and administer its circulation;
(4)
Regulate and supervise the inter-bank lending market and the inter-bank bond
market;
(5)
Execute foreign exchange administration, regulate and supervise the inter-bank
foreign exchange market;
(6)
Regulate and supervise the gold market;
(7)
Hold, administer and manage the state foreign exchange reserves and gold reserves;
(8)
Manage the State treasury;
(9)
Ensure normal operation of the payment and settlement systems;
(10)
Guide and arrange anti-money laundering work in the financial sector and
monitor of fund movement for anti-money laundering purpose;
(11)
Conduct statistics, survey, analysis and forecasts of the financial industry;
(12)
Participate in related international financial activities in the capacity of
the central bank of the State;
(13)
Perform other functions assigned by the State Council.
To implement
monetary policy, the People's Bank of China may engage in financial operations
in accordance with the relevant provisions of Chapter IV of this Law.
Article 5 The People's Bank of China shall report to the State Council its
decisions concerning annual monetary supply, interest rate, exchange rate and
other important issues specified by the State Council for approval before they
are implemented.
The
People's Bank of China may, on its own, make and put into immediate effect
decisions on other monetary policy issues other than those specified in the
preceding paragraph, provided it reports to the State Council for record.
Article 6 The People's Bank of China shall submit work reports to the Standing
Committee of the National People's Congress on monetary policy and performance
of the financial sector.
Article 7 The People's Bank of China shall, under the leadership of the State
Council, independently implement monetary policy, perform its functions and
carry out its business operations according to law and be free from
intervention by local governments, government departments at various levels,
non-governmental organizations and individuals.
Article 8 All capital of the People's Bank of China is funded by the State and
owned by the State.
Article 9 The State Council shall establish a coordinating mechanism for
financial supervision and regulation. The details of the mechanism shall be
determined by the State Council.
Chapter II Organizational Structure
Article 10 The People's Bank of China shall have one Governor and a certain
number of Deputy Governors. The the Governor of the People's Bank of China
shall be nominated by the Premier of the State Council and decided by the
National People's Congress. When the National People's Congress is in
adjournment, the Governor shall be decided by the Standing Committee of the
National People's Congress and appointed or removed by the President of the
People's Republic of China. The Deputy Governors of the People's Bank of China shall be
appointed or removed by the Premier of the State Council.
Article 11 The People's Bank of China adopts a governor accountability system.
The Governor shall be the chief officer of the People's Bank of China, while
the Deputy Governors shall assist the Governor in fulfilling his or her duty.
Article 12 The People's Bank of China is to establish a monetary policy
committee, whose responsibilities, composition and working procedures shall be
prescribed by the State Council and reported to the Standing Committee of the
National People's Congress for record.
The
Monetary Policy Committee shall play an important role in macroeconomic
management as well as in the formulation and adjustment of the monetary policy.
Article 13 The People's Bank of China shall establish branch offices as its
representative organs in light of the need to perform its functions, and shall
administer these branch offices on a centralized basis.
The
branch offices of the People's Bank of China shall, as authorized by the
People's Bank of China, undertake to maintain financial stability in their
respective jurisdictions and conduct relevant business operations.
Article 14 The Governor, Deputy Governors and other employees of the People's
Bank of China shall faithfully fulfill their duties and shall not abuse their
power or seek illegitimate personal gains. They shall not assume positions in
any other financial institutions, enterprises or foundations.
Article 15 The Governor, Deputy Governors and other employees of the People's
Bank of China shall protect the State secrets and the secrets of the financial
institutions and parties obtained in performing the functions of the People's
Bank of China.
Chapter III The Renminbi
Article 16 The legal tender of the People's Republic of China is the Reminbi. No institution or
individual shall reject the renminbi as a medium of payment for any public or
private debts within the territory of the People's Republic of China.
Article 17 The unit of the renminbi is yuan and the fractional units of the
Renminbi are Jiao and Fen.
Article 18 The renminbi shall be printed and issued solely by the
People's Bank of China.
When
issuing a new edition of the renminbi, the People's Bank of China shall make known to the
public the issuing date, face values, designs, patterns and specifications.
Article 19 It is prohibited to counterfeit or alter the renminbi. It is
prohibited to sell or purchase counterfeit and altered renminbi. It is
prohibited to transport, hold or use counterfeit and altered renminbi. It is
prohibited to deliberately destroy or damage the renminbi. It is prohibited to
illegally use images of the renminbi in advertisement, publications or other
commodities.
Article 20 No institutions or individuals may print or issue substitute
money to replace the renminbi in market circulation.
Article 21 The damaged renminbi shall be exchanged in accordance with the
regulations of the People's Bank of China, and shall be recalled and destroyed
by the People's Bank of China.
Article 22 The People's Bank of China shall establish a renminbi issue vault
and shall establish subsidiary issue vaults at its branch offices. The
subsidiary issue vaults shall, in allocating renminbi's issue fund, act on the
order of allocation from their superior vault. No institutions or individuals
may use the issue fund in violation of regulations.
Chapter IV Business Operations
Article 23 To implement monetary policy, the People's Bank of China may apply
the following monetary policy instruments:
(1)
Require banking institutions to place deposit reserves at a given ratio;
(2)
Determine the benchmark interest rate of the central bank;
(3)
Conduct rediscount for banking financial institutions with accounts in the
People's Bank of China;
(4)
Provide lending to commercial banks;
(5)
Trade treasury bonds, other government securities, financial bonds and foreign
exchange on the open market;
(6)
Other monetary policy instruments specified by the State Council.
When
applying the above-mentioned monetary policy instruments to implement monetary
policy, The People's Bank of China may formulate detailed conditions and
procedures.
Article 24 The People's Bank of China shall manage the state treasury in
accordance with laws, administrative rules and regulations.
Article 25 The People's Bank of China may, on behalf of the fiscal authorities
under the State Council, issue and redeem treasury bonds and other government
securities to financial institutions.
Article 26 The People's Bank of China may open accounts for banking financial
institution as needed, but may not provide overdraft for these accounts.
Article 27 The People's Bank of China shall organize or assist in organizing a
clearing system among banking financial institutions, coordinate clearing
arrangements among them and provide clearing service. The detailed rules shall
be formulated by the People's Bank of China.
The
People's Bank of China shall formulate rules on payment and settlement together
with the banking regulatory authority under the State Council.
Article 28 The People's Bank of China may, as needed in its monetary policy
implementation, decide on the amount, maturity, interest rate and modality of
its lending to the commercial banks. The maturity of such lending shall not be
longer than one year.
Article 29 The People's Bank of China shall not provide overdraft for government
or directly subscribe to or underwrite treasury bonds and other government
securities.
Article 30 The People's Bank of China shall not lend to local governments and
government agencies at various levels, or to non-bank financial institutions,
other organizations and individuals. However, in exceptional cases, it may lend
to non-bank financial institutions deemed eligible by the State Council for such
lending.
The
People's Bank of China shall not provide guarantee for any institutions or
individuals.
Chapter V Financial Supervision and Regulation
Article 31 The People's Bank of China shall, in accordance with law, monitor
and regulate developments of the financial markets so as to promote their
coordinated development.
Article 32 The People's Bank of China may conduct supervision and examination on
following activities of the financial institutions, other institutions and
individuals:
(1)
Compliance with regulatory rules on reserve requirement;
(2)
Activities relating to special lending of the People's Bank of China;
(3)
Compliance with regulatory rules on the Renminbi;
(4)
Compliance with regulatory rules on the inter-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's Bank of China;
(8)
Compliance with clearing and settlement regulations; and
(9)
Compliance with anti-money laundering regulations.
The
above-mentioned special lending of the People's Bank of China refers to loans
extended by the People's Bank of China, upon approval of the State Council, to
financial institutions for specified uses.
Article 33 When the People's Bank of China deems it necessary for implementing
monetary policy and maintaining financial stability, the banking regulatory
authority under the State Council may request to conduct supervisory
examinations on banking financial institutions. The banking regulatory
authority shall respond within 30 days after receiving such a request.
Article 34 Where banking financial institutions have payment difficulties that
may trigger financial risks, the People's Bank of China may, with the approval
of the State Council, conduct examination and supervision on such institutions
so as to maintain financial stability.
Article 35 The People's Bank of China may require banking financial
institutions to submit balance sheets, income statements and other financial
statements, and statistical data and information as needed for performing its
functions.
The
People's Bank of China shall establish a supervisory information sharing system
together with the banking regulatory authority and other financial supervisory
authorities under the State Council.
Article 36 The People's Bank of China is responsible for the
compilation of consolidated statistical data and reports of the financial
industry and disclose them to the public in accordance with relevant
regulations of the State.
Article 37 The People's Bank of China shall establish and improve
the internal audit and examination system and strengthen its internal control.
Chapter VI Financial and Accounting
Article 38 The People's Bank of China shall have an independent
budget arrangement.
Its
budget shall be reviewed by the fiscal authority and become part of the central
government budget. Its execution is subject to the supervision of the fiscal
authority under the State Council.
Article 39 The People's Bank of China surrender to the central budget its
net profit each accounting year after making general provisions at a level set
by the fiscal authority.
Losses
of the People's Bank of China shall be covered by fiscal appropriation from the
central budget.
Article 40 The receipts and payments of funds and accounting practice of
the People's Bank of China shall comply with laws, administrative rules and
regulations and the State's unified accounting standards, and be subjected to
separate auditing and supervision in accordance with law by the auditing and
the fiscal authorities under the State Council respectively.
Article 41 The People's Bank of China shall, within three months
after the end of each accounting year, compile its balance sheet, income
statement and relevant financial statements, prepare its annual report and
publish them in accordance with relevant regulations of the State.
The
accounting year of the People's Bank of China begins on the first day of
January and ends on the thirty-first day of December of the Gregorian calendar.
Chapter VII Legal Liabilities
Article 42 Anyone who counterfeits or alters the renminbi or sells counterfeit
or altered renminbi, or knowingly transports counterfeit renminbi, if already
constituting a crime, shall be liable to criminal 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 more than 10,000 yuan by a public security
organ.
Article 43 Anyone who buys counterfeit or altered Renminbi or knowingly
holds or uses counterfeit or altered Renminbi, if already constituting a crime,
shall be investigated for criminal responsibility. 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 more than 10,000 yuan by a public security
organ.
Article 44 If anyone illegally uses the images of Renminbi in
advertisement, publications or other commodities, the People's Bank of China
shall order a correction destroy the illegally used images of Renminbi,
confiscate the illegal gains and impose a fine of no more than 50,000 yuan.
Article 45 If anyone 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 and impose a fine of no more than 200,000 yuan.
Article 46 In case of non-compliance under Article 32, where there are
penalties indicated in relevant laws and regulations, a punishment shall be
imposed accordingly. If there are no penalties indicated in these laws and
regulations, the People's Bank of China is to execute a range of punishment
according to the severity of each case. The punishments include issuing a
warning, confiscating illegal gains, imposing a fine of no less than one time
but no more than five times of the value of illegal gains in the case of such
gains exceeding 500,000 yuan, or a fine of 500,000 yuan to 2,000,000 yuan in
the case of no illegal gains or such gains are less than 500,000 yuan.
Directors, senior management or other parties directly responsible 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 to accept the administrative
punishment, he or she may file an administrative a
