Chinese lawmakers have proposed comprehensive revisions to the country’s banking supervision and administration law, aiming to enhance the quality and effectiveness of financial services in the real economy. The proposed amendments would represent the most significant overhaul of the law since its implementation in February 2004.
The Constitution and Law Committee of the National People’s Congress (NPC) presented the draft amendments to the NPC Standing Committee on Tuesday, recommending their submission to the 24th session of the 14th NPC Standing Committee for further consideration. The revisions seek to align the law more closely with the draft Financial Law by splitting the existing Chapter Four, “Supervision and Administration Measures,” into separate chapters focusing on supervisory measures and risk resolution.
Key changes in the draft include strengthening regulatory requirements through classified and tiered supervision of banking institutions, clarifying the responsibilities of supervisory authorities, enhancing protections for banking consumers, and refining provisions on legal liability. The amendments also emphasize improving the overall quality and effectiveness of financial services provided to the real economy as a legislative goal.
Several NPC Standing Committee members, legislators, government departments, local authorities, and members of the public have called for greater accountability in banking regulation, particularly in safeguarding consumer rights. The draft amendments propose prohibiting banking institutions and their employees from engaging in practices that harm customers’ lawful rights. Such practices include misappropriation of funds, coercing customers into purchasing bundled products or services, offering products that do not align with customers’ risk tolerance, and using improper debt collection methods.
The proposal designates the banking regulatory authority under the State Council as the entity responsible for coordinating consumer protection within the banking sector. It calls for the establishment and improvement of a comprehensive consumer protection framework, including mechanisms for handling complaints and resolving disputes through multiple channels.
In regard to financial institution risk management, the draft expands takeover measures to encompass a broader range of crisis-response tools. These include revoking business licenses, compulsory equity transfers, requiring repatriation of overseas assets, and mandating support from related domestic and foreign entities within a banking group. The responsibility for risk resolution differs based on the institution’s scale: nationwide banking institutions would be managed by the State Council’s regulatory authority, whereas local, small- and medium-sized institutions would be overseen by relevant provincial or municipal authorities, with the central regulator providing guidance and coordination.
Ding Xiangqun, minister of the National Financial Regulatory Administration, highlighted in June at the Lujiazui Forum that China plans to accelerate amendments not only to the banking supervision law but also to the insurance law, aiming to better synchronize financial legislation with regulatory practices. These efforts are part of broader initiatives to bolster financial stability and consumer confidence within the country’s banking system.