Laws of the People's Republic of China

China Banking Regulatory Commission

Order of China Banking Regulatory Commission

No. 3

The "Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative Financial Institutions", which were adopted at the 40th chairman's meeting of China Banking Regulatory Commission on November 10, 2005, are hereby promulgated, and shall come into force on February 1, 2006.

Chairman Liu Mingkang

January 12, 2006

Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Cooperative Financial Institutions

Chapter I General Provisions

Article 1

The present measures are formulated in accordance with the "Law of the People's Republic of China on the Regulation of the Banking Industry", the "Administrative License Law of the People's Republic of China", the "Law of the People's Republic of China on Commercial Banks" as well as other laws, administrative regulations, and the relevant decisions of the State Council for the purpose of regulating China Banking Regulatory Commission (hereinafter referred to as CBRC) and its dispatched offices in their granting administrative licenses to cooperative financial institutions, clarifying the administrative licensing matters, conditions, applicable operational flows and term, and protecting the lawful rights and interests of the applicants.

Article 2

Cooperative financial institutions as mentioned in the present measures shall include: rural credit cooperatives, associate rural credit cooperative unions of the counties (cities, districts), rural credit cooperative unions of the counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities), associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), rural cooperative banks, and rural commercial banks.

Article 3

CBRC and its dispatched offices shall comply with the present measures and the "Provisions of China Banking Regulatory Commission on the Procedures for Granting Administrative Licenses" when granting administrative licenses to cooperative financial institutions.

Article 4

The following matters of a cooperative financial institution shall be subject to administrative license of CBRC or its dispatched office: establishment, modification or termination of the institution, adjustment of the business scope, addition of new varieties of business, qualifications for holding the positions of council members (directors) and senior managers, and so on.

Article 5

An applicant shall submit the application materials in accordance with the "Catalogue of China Banking Regulatory Commission on Application Materials for Administrative Licensing Matters and the Format Requirements".

Chapter II Establishment of Legal Person Institutions

Section 1 Establishment of Rural Credit Cooperatives

Article 6

For the establishment of a rural credit cooperative, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 500 initiators;

(3)

The minimum amount of registered capital shall be RMB 1 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 7

For the establishment of a rural credit cooperative, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(2)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(3)

It has an effective capital restraint and supplement mechanism;

(4)

It contain no shares held by the local people's government in the form of fiscal funds; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 8

For the establishment of a rural credit cooperative, there shall be qualified initiators. Such initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions and other initiators acknowledged by CBRC.

The expression "overseas financial institutions" as mentioned in the preceding paragraph shall include the financial institutions from Hong Kong, Macao and Taiwan regions.

Article 9

A natural person initiator shall meet the following conditions:

(1)

He has full capacity for civil conduct;

(2)

He has good social prestige as well as honesty and credibility records;

(3)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others;

(4)

He is a resident of the locality of the rural credit cooperative to be established, or a non-local resident who has a fixed domicile at the said locality and has resided for at least 3 years; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 10

The proportion of the shares of a single natural person shall not exceed 2%, and the proportion of the total shares of employees shall not exceed 25%.

Article 11

As an initiator, a domestic non-financial institution shall meet the following conditions:

(1)

It has been registered in the administrative department for industry and commerce, and has the status as a legal person;

(2)

It has good social prestige, honesty and credibility records, as well as tax payment records;

(3)

It is in good financial situation, and made profits continuously in the latest 2 accounting years;

(4)

It has strong management capabilities and fund strength;

(5)

After the year-end distribution of profits, its net assets reach 30% of the total assets or even higher (by standard of consolidated accounting statements);

(6)

The balance of its equity investments shall generally not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements);

(7)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others;

(8)

Its place of registration is within the jurisdiction of the rural credit cooperative to be established; and

(9)

Other conditions on prudence as prescribed by CBRC.

Article 12

The proportion of the total shares of a single domestic non-financial institution and its associated parties shall not exceed 10%.

Article 13

As an initiator, a domestic financial institution shall meet the following conditions:

(1)

Its capital adequacy ratio shall not be lower than 8% if it is a bank, and the total amount of its capital shall not be lower than 10% of the total amount of its risk-weighted assets if it is a non-bank financial institution;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements);

(3)

It made profits continuously in the latest 2 accounting years;

(4)

It has good corporate governance, as well as sound and effective internal control rules;

(5)

Its main prudent regulatory indices meet the regulatory requirements; and

(6)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), associate rural credit cooperative unions of the prefectures (cities), or associate rural credit cooperative unions of the counties (cities, districts) may hold shares of a rural credit cooperative.

Article 14

The proportion of the total shares of a single domestic financial institution and its associated parties shall not exceed 20%.

Article 15

As an initiator, an overseas financial institution shall meet the following conditions:

(1)

Its total year-end assets in the latest year shall generally be no less than 1,000 million USD;

(2)

If it is an international rating institution acknowledged by CBRC, its long-term credit was rated by CBRC as good in the latest 2 years;

(3)

It has been keeping a favorable balance in the latest 2 accounting years;

(4)

Its capital adequacy ratio shall reach the average level of capital adequacy ratio for the banking sector at the place of its registration and shall not be lower than 8% if it is a bank, or the total amount of its capital shall not be lower than 10% of the total amount of risk-weighted assets if it is a non-bank financial institution;

(5)

It has sound internal control rules;

(6)

The financial institution at the place of registration has sound supervision and management rules;

(7)

Its home country (region) is in good economic situation; and

(8)

Other conditions on prudence as prescribed by CBRC.

CBRC may, when required by the risk situation of the financial industry and the supervision thereof, adjust the conditions for overseas financial institutions to hold the shares.

Article 16

The proportion of the shares held by a single overseas financial institution in a single rural credit cooperative shall not exceed 20%. The proportion of the total shares of more than one overseas financial institution shall not exceed 25%.

The expression "proportion of the shares" as mentioned in the preceding paragraph shall refer to the proportion of the total shares held by an overseas financial institution in a rural credit cooperative. The proportion of shares held by an associated party of the overseas financial institution shall be counted into that of the overseas financial institution.

Article 17

The establishment of a rural credit cooperative shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural credit cooperative, a preparatory establishment team shall be formed, and the initiators of the rural credit cooperative shall entrust the preparatory establishment team as the applicant.

Article 18

The application for preparatory establishment of a rural credit cooperative within the jurisdiction of a banking regulatory branch office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory branch office) shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the supervisory office of China Banking Regulatory Commission (hereinafter referred to as banking regulatory office) for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for the preparatory establishment of a rural credit cooperative within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 19

The term of preparatory establishment of a rural credit cooperative shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit the application for postponing the preparatory establishment to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 20

The application of a rural credit cooperative within the jurisdiction of a banking regulatory branch office for the initiation of business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a rural credit cooperative within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 21

A rural credit cooperative shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to apply for a business license.

A rural credit cooperative shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit the application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural credit cooperative fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 2 Establishment of Rural Associate Credit Cooperative Unions of Counties (Cities, Districts)

Article 22

For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

The associate union is established by means of initiation and there are no less than 8 rural credit cooperatives within the jurisdiction;

(3)

The minimum amount of its registered capital is RMB 1 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 23

For the establishment of an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 24

For the establishment of an associate rural credit cooperative union of a county (city, district), there shall be qualified initiators, and the initiators shall be rural credit cooperatives within the jurisdiction.

The employees of an associate rural credit cooperative union of a county (city, district) may hold shares by centralizing their funds.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or associate rural credit cooperative unions of the prefectures (cities) shall hold shares of an associate rural credit cooperative union of a county (city, district).

Article 25

As an initiator, a rural credit cooperative shall meet the following conditions:

(1)

The place of registration is located within the jurisdiction of the associate rural credit cooperative union of the county (city, district) to be established;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments); and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 26

A single rural credit cooperative shall hold no less than 50,000 shares, and the proportion of its shares shall not exceed 20%.

Article 27

Any of the employees of a shareholding associate rural credit cooperative union of a county (city, district) shall meet the following conditions:

(1)

He has full capacity for civil conduct;

(2)

His share funds are owned by himself and the sources are lawful, and he shall not hold shares by contributing loans or contributing funds commissioned by others; and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 28

The proportion of the shares of a single employee shall not exceed 2%, and the proportion of the total shares of all employees shall not exceed 25%.

Article 29

The establishment of an associate rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of an associate rural credit cooperative union of a county (city, district), a preparatory establishment team shall be formed, and the initiators of the associate rural credit cooperative union of the county (city, district) shall entrust the preparatory establishment team as the applicant.

Article 30

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 31

The term of preparatory establishment of an associate rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 32

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of an associate rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 33

An associate rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

An associate rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit an application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the associate rural credit cooperative union of the county (city, district) fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of the business and the financial business permit, and make an announcement.

Section 3 Establishment of Rural Credit Cooperatives of Counties (Cities, Districts)

Article 34

For the establishment of a rural credit cooperative of a county (city, district), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 1,000 initiators;

(3)

Its registered capital shall be RMB 10 million Yuan or more;

(4)

It has council members and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

The banking regulatory office may, in light of the actual situation of the locality of the rural credit cooperative union of the county (city, district) to be established, make a proper adjustment to the registered capital in Item (3) of the preceding paragraph, provided that the amount of registered capital shall not be less than RMB 5 million Yuan.

Article 35

For the establishment of a rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds; and

(6)

Other conditions on prudence as prescribed by CBRC.

For the establishment of a rural credit cooperative union of a county (city, district) by means of consolidation, the applicant shall meanwhile meet the following conditions in addition:

(1)

Both the rural credit cooperative and the associate rural credit cooperative union of the county (city, district) participate in the establishment voluntarily;

(2)

The associate rural credit cooperative union of the a county (city, district) has strong management capabilities;

(3)

The rural credit cooperative and the associate rural credit cooperative union of the county (city, district) make an estimation according to consolidated financial statements, which shows that it is solvent;

(4)

Its core capital adequacy ratio shall be no lower than 2%, and may continue to be raised after establishment.

Article 36

For the establishment of a rural credit cooperative union of a county (city, district), there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions, and other initiators acknowledged by CBRC.

Article 37

The initiators shall conform to the provisions in Article 9 and Articles 11 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы, the proportion of the total shares of the employees shall not exceed 25%, and the proportion of the total shares of all natural persons shall be no less than 50%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or of the associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural credit cooperative union of a county (city, district).

Article 38

The establishment of a rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural credit cooperative union of a county (city, district), a preparatory establishment team shall be formed, and the initiators of the rural credit cooperative union shall entrust the preparatory establishment team as the applicant.

Article 39

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and shall be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 4 months as of the acceptance, make a written decision on approval or disapproval.

Article 40

The term of preparatory establishment of a rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the banking regulatory office the application for postponing the preparatory establishment. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 41

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business, shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business, shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 42

A rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit an application for postponing the initiation of business to the banking regulatory office. The banking regulatory office shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the abovementioned rural credit cooperative union fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 4 Establishment of Associate Rural Credit Cooperative Unions of the Provinces (Autonomous Regions, Municipalities Directly under the Central Government)

Article 43

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation;

(3)

The minimum amount of its registered capital is RMB 5 million Yuan, which shall be paid-in capital;

(4)

It has council members and senior managers who meet the conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has a qualified domicile, the fire prevention facilities, and other facilities relevant to its business.

Article 44

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has scientific and effective human resources management rules, and professional talents with high qualities;

(3)

It has an effective capital restraint and supplement mechanism;

(4)

It contains no shares held by the local people's government in the form of fiscal funds; and

(5)

Other conditions on prudence as prescribed by CBRC.

Article 45

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), there shall be qualified initiators. The initiators shall include: associate rural credit cooperative unions of counties (cities, districts), rural credit cooperatives of counties (cities, districts), associate rural credit cooperative unions of the prefectures (cities), and rural cooperative banks, which are within the jurisdiction. A rural commercial bank may act as an initiator of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) at its own free will.

Article 46

An associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank, or a rural commercial bank shall, as an initiator, meet the following conditions:

(1)

Its place of registration shall be located within the jurisdiction of the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government), which is to be established;

(2)

The balance of its equity investments shall not exceed 50% of its net assets (including the amount of current investments, by standard of consolidated accounting statements); and

(3)

Other conditions on prudence as prescribed by CBRC.

Article 47

The proportion of the shares of a single associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank, or a rural commercial bank shall not exceed 10%, and the amount of shares it holds shall not exceed 30% of its paid-in capital.

Article 48

The establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government), a preparatory establishment team shall be formed, and the initiators of the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall entrust the preparatory establishment team as the applicant.

Article 49

The application for preparatory establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 50

The term of preparatory establishment of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC an application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 51

The application of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 52

An associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

An associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the associate rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 5 Establishment of Rural Cooperative Banks

Article 53

For the establishment of a rural cooperative bank, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the provisions of CBRC;

(2)

It is established by means of initiation, and there shall be no less than 1,000 initiators;

(3)

The minimum amount of registered capital shall be RMB 20 million Yuan;

(4)

It has directors and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of president and vice president(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules; and

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business.

Article 54

For the establishment of a rural cooperative bank, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds;

(6)

It is established by means of institutional reform on the basis of an associate rural credit cooperative union, a rural credit cooperative, or a rural credit cooperative union of a county (city, district);

(7)

Prior to the establishment, the ratio of non-performing loans (five-level classification) of the associate rural credit cooperative union, which is estimated under the consolidated financial statements, shall be lower than 15%, or the ratio of non-performing loans (five-level classification) of the rural credit cooperative union shall be lower than 15%;

(8)

The core capital adequacy ratio shall be no lower than 4%, and the capital adequacy ratio shall be no lower than 8%;

(9)

The proportion of the shares to the total amount of stock capital shall be no lower than 60%;

(10)

Its owners'' equity is larger than the stock capitals;

(11)

It has the proportion and scale of granting loans to support farmers, which are determined by the shareholders'' congress and conform to the local actual situation; and

(12)

Other conditions on prudence as prescribed by CBRC.

Article 55

For the establishment of a rural cooperative bank, there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions and other initiators acknowledged by CBRC.

Article 56

The initiators must conform to Article 9 , Article 11 and Articles 13 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы; and the proportion of the shares of all employees shall not exceed 25%.

The proportion of the shares of a single domestic non-financial institution and all its associated parties shall not exceed 10%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural cooperative bank.

Article 57

The establishment of a rural cooperative bank shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural cooperative bank, a preparatory establishment team shall be formed, and the initiators of the rural cooperative bank shall entrust the preparatory establishment team as the applicant.

Article 58

A rural cooperative bank's application for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 59

The term of preparatory establishment of a rural cooperative bank shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC the application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 60

A rural cooperative bank's application for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 61

A rural cooperative bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural cooperative bank shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural cooperative bank fails to initiate its business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 6 Establishment of Rural Commercial Banks

Article 62

For the establishment of a rural commercial bank, the applicant shall meet the following conditions:

(1)

It has the articles of association conforming to the "Company Law of the People's Republic of China", the "Law of the People's Republic of China on Commercial Banks" and the provisions of CBRC;

(2)

It is established by means of initiation and there shall be no less than 500 initiators;

(3)

The minimum amount of its registered capital shall be RMB 50 million Yuan;

(4)

It has directors and senior managers who meet the qualification conditions for holding their respective positions;

(5)

There are no less than 2 persons who hold the positions of president and vice president(s);

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year or have the technical secondary school diploma or above majoring in finance or similar field;

(7)

It has a sound organizational structure and management rules;

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(9)

Other conditions prescribed by CBRC.

Article 63

For the establishment of a rural commercial bank, the applicant shall meet the following conditions on prudence in addition:

(1)

It has a good corporate governance structure;

(2)

It has a sound risk management system, and is capable of effectively controlling the risks in associated transactions;

(3)

It has scientific and effective human resources management rules, and has professional talents with high qualities;

(4)

It has an effective capital restraint and supplement mechanism;

(5)

It contains no shares held by the local people's government in the form of fiscal funds;

(6)

It is established by means of institutional reform on the basis of an associate rural credit cooperative union, a rural credit cooperative, a rural credit cooperative union, or a rural cooperative bank;

(7)

Prior to the establishment, the total assets of the associate rural credit cooperative union, which is estimated under the consolidated financial statements, shall be 1,000 million Yuan or more, and the ratio of non-performing loans (five-level classification) shall be lower than 15%, or the total assets of the rural credit cooperative union or rural cooperative bank shall be 1,000 million Yuan or more, and the ratio of non-performing loans (five-level classification) shall be lower than 15%;

(8)

Its core capital adequacy ratio shall be no lower than 4%, and its capital adequacy ratio shall be no lower than 8%;

(9)

Its owners'' equity is larger than its stock capital;

(10)

It has the proportion and scale of granting loans to support farmers, which are determined by the shareholders'' meeting and conform to the local actual situation; and

(11)

Other conditions on prudence as prescribed by CBRC.

Article 64

For the establishment of a rural commercial bank, there shall be qualified initiators. The initiators may include: natural persons, domestic non-financial institutions, domestic financial institutions, overseas financial institutions, and other initiators acknowledged by CBRC.

Article 65

The initiators must conform to Article 9 , Article 11 and Articles 13 through 16 of the present measures.

The proportion of the shares of a single natural person shall not exceed 5бы; and the proportion of the total shares of all employees shall not exceed 25%.

The proportion of the total shares of a single domestic non-financial institution and all its associated parties shall not exceed 10%.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government), or the associate rural credit cooperative unions of the prefectures (cities) shall hold shares of a rural commercial bank.

Article 66

The establishment of a rural commercial bank shall include two stages, namely, preparatory establishment and initiation of the business.

For the establishment of a rural commercial bank, a preparatory establishment team shall be formed, and the initiators of the rural commercial bank shall entrust the preparatory establishment team as the applicant.

Article 67

A rural commercial bank's application for preparatory establishment shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 4 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 68

The term of preparatory establishment of a rural commercial bank shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the applicant shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to CBRC the application for postponing the preparatory establishment. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The applicant shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 69

A rural commercial bank's application for the initiation of business shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

Article 70

A rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A rural commercial bank shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the applicant shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to CBRC the application for postponing the initiation of business. CBRC shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a rural commercial bank fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Chapter III Establishment of Non-legal-person Institutions

Section 1 Establishment of Branches of Rural Credit Cooperatives, and Those of Associate Rural Credit Cooperative Unions of Counties (Cities, Districts)

Article 71

For the establishment of a branch of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), the applicant shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

The internal control rules of the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(3)

The rural credit cooperative or the associate rural credit cooperative union of the county (city, district) has good asset quality;

(4)

The rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall, if planning to establish branches, allot working capital suitable for its business scale in accordance with the provisions, provided that the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(5)

The working capital shall be no less than RMB 300,000 Yuan;

(6)

The capital adequacy ratio of the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall be no lower than 2%;

(7)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(8)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(9)

Other conditions on prudence as prescribed by CBRC.

A rural credit cooperative union of a county (city, district) shall not establish a branch.

Article 72

The establishment of a branch shall include two stages, namely, preparatory establishment and initiation of the business.

Article 73

The application for preparatory establishment of a branch within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for preparatory establishment of a branch within the jurisdiction of the city where the banking regulatory office is located, shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of acceptance, make a written decision on approval or disapproval.

Article 74

The term of preparatory establishment of a branch shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative or the associate rural credit cooperative union of the county (city, district) shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit the application for postponing the preparatory establishment to the deciding organ. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

A rural credit cooperative or an associate rural credit cooperative union of a county (city, district) shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 75

The application of a branch within the jurisdiction of the banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

The application of a branch within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative or the associate rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 76

A rural credit cooperative or an associate rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A branch shall initiate the business within 6 months as of obtaining a business license. In the case of any particular circumstance, the rural credit cooperative or the associate rural credit cooperative union of a county (city, district) shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where a branch fails to initiate the business within the time limit as prescribed in the preceding paragraph, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 2 Establishment of Credit Cooperatives by Rural Credit Cooperative Unions of Counties (Cities, Districts)

Article 77

Where a rural credit cooperative union of a county (city, district) plans to establish a credit cooperative, it shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

The rural credit cooperative union of the county (city, district) shall, if planning to establish a credit cooperative, allot working capital suitable for its business scale in accordance with the legal provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(3)

The internal control rules of the rural credit cooperative union of the county (city, district) are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(4)

The rural credit cooperative union of the county (city, district) has good asset quality;

(5)

The capital adequacy ratio of the rural credit cooperative union of the county (city, district) shall be no lower than 4%;

(6)

Its working capital shall be no less than RMB 1 million Yuan;

(7)

It has senior managers who meet the qualification conditions for holding their respective positions;

(8)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(9)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(10)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(11)

Other conditions on prudence as prescribed by CBRC.

The banking regulatory office may, in light of the actual situation of the locality of the credit cooperative to be established by the rural credit cooperative union of the county (city, district), make proper adjustment to the minimum amount of the working capital in accordance with Item (6) of the preceding paragraph, provided that the adjusted amount shall not be less than RMB 500,000 Yuan.

Article 78

The establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) shall include two stages, namely, preparatory establishment and initiation of business.

Article 79

The application for preparatory establishment of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for preparatory establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 80

The term of preparatory establishment of a credit cooperative by a rural credit cooperative union of a county (city, district) shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative union of the county (city, district) shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ preparation the application for postponing the establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural credit cooperative union of the county (city, district) shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit the application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 81

The application of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

The application of the credit cooperative of a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative union of the county (city, district), and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 82

The rural credit cooperative union of a county (city, district) shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

The credit cooperative of a rural credit cooperative union of a county (city, district) shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural credit cooperative union of the county (city, district) shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ an application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the credit cooperative of a rural credit cooperative union of a county (city, district) fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 3 Establishment of Representative Offices of Rural Credit Cooperative Unions of the Provinces (Autonomous Regions, Municipalities Directly under the Central Government)

Article 83

For the establishment of a representative office, the concerned rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall meet the following conditions:

(1)

It complies with the principles of high benefits and low costs;

(2)

It has senior managers who meet the qualification conditions for holding their respective positions;

(3)

There are no less than 2 persons who hold the positions of director general and vice director general(s);

(4)

No less than 80% of practitioners have engaged in financial work for at least 1 year or majoring in finance or similar field a technical secondary school diploma or above;

(5)

It has a qualified office place; and

(6)

Other conditions on prudence as prescribed by CBRC.

Article 84

An application for the establishment of a representative office by a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be submitted by the said union, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 85

Within 3 months as of the day when the banking regulatory office grants the approval, the representative office of the rural credit cooperative union of the province (autonomous region, municipality directly under the Central Government) shall be established.

Where the representative office of a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) is not established within the prescribed time limit, the deciding organ shall nullify the license for establishment, take back the document on ratification of the establishment, and make an announcement.

Section 4 Establishment of Sub-branches of Rural Cooperative Banks or of Rural Commercial Banks

Article 86

A rural cooperative bank or rural commercial bank that plans to establish a sub-branch shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

It shall allot working capital suitable for its business scale in accordance with the provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(3)

Its working capital shall be no less than RMB 1 million Yuan;

(4)

Its internal control rules are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(5)

It has good asset quality, and the proportion of its non-performing loans is 15% or below;

(6)

Its capital adequacy ratio shall be no lower than 8%;

(7)

It has senior managers who meet the qualification conditions for holding their respective positions;

(8)

There are no less than 2 persons who hold the positions of president and vice president(s);

(9)

No less than 80% of its practitioners have engaged in financial work for at least 1 year;

(10)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(11)

Other conditions on prudence as prescribed by CBRC.

Article 87

The establishment of a sub-branch shall include two stages, namely, preparatory establishment and the initiation of business.

Article 88

The application for preparatory establishment of a sub-branch within the jurisdiction of a banking regulatory branch office shall be submitted by the rural cooperative bank or rural commercial bank, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a sub-branch within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 89

The term of preparatory establishment of a sub-branch shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ an application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 90

The application of a sub-branch within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a sub-branch within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 91

A rural cooperative bank or rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A sub-branch shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the sub-branch fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 5 Establishment of Sub-offices of Rural Cooperative Banks and Rural Commercial Banks

Article 92

A rural cooperative bank or rural commercial bank that plans to establish a sub-office shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

Its internal control rules are sound and effective, and no serious illegal conduct, rule-breaking conduct or major case occurred in the latest 2 years;

(3)

For the establishment of the sub-office, it shall allot working capital suitable for its business scale in accordance with the provisions, and the sum of working capital allotted to all branches shall not exceed 60% of the total amount of its capital;

(4)

Its capital adequacy ratio shall be no lower than 8%;

(5)

Its working capital shall be no less than RMB 500,000 Yuan;

(6)

No less than 80% of practitioners have engaged in financial work for at least 1 year;

(7)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(8)

Other conditions on prudence as prescribed by CBRC.

Article 93

The establishment of a sub-office shall include two stages, namely, preparatory establishment and the initiation of business.

Article 94

An application for preparatory establishment of a sub-office within the jurisdiction of a banking regulatory branch office shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a sub-office within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 95

The term of preparatory establishment of a sub-office shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ the application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for the preparatory establishment.

Article 96

The application of a sub-office within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of a sub-office within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 97

A rural cooperative bank or rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A sub-office shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural cooperative bank or rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ an application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the sub-office fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 6 Establishment of Savings Houses of Cooperative Financial Institutions

Article 98

Where a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative of a county (city, district), a rural cooperative bank or a rural commercial bank plans to establish a savings house, it shall meet the following conditions:

(1)

The local community has the demand for financial services;

(2)

Its internal control rules are sound and effective, and no illegal conduct, serious rule-breaking conduct or major case occurred in the latest 2 years;

(3)

No less than 80% of its practitioners have engaged in financial work for at least 1 year;

(4)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(5)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government) or of associate rural credit cooperative unions of the prefectures (cities) shall establish a savings house.

Article 99

The establishment of a savings house shall include two stages, namely, preparatory establishment and the initiation of business.

Article 100

The application for preparatory establishment of a savings house within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for preparatory establishment of a savings house within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 101

The term of preparatory establishment of a savings house shall be 6 months as of the day when the decision on approval is made. In the case of any particular circumstance, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall, within 1 month prior to expiry of the time limit for preparatory establishment, submit to the deciding organ the application for postponing the preparatory establishment. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for preparatory establishment shall be 3 months.

The rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall, prior to the expiry of the time limit prescribed in the preceding paragraph, submit an application for the initiation of business. If it fails to submit the application within the time limit, the deciding organ shall nullify the license for preparatory establishment, and take back the approval document for preparatory establishment.

Article 102

The application of the savings house within the jurisdiction of a banking regulatory branch office for the initiation of business shall be submitted by the rural credit cooperative, the associate rural credit cooperative union of the county (city, district), the rural credit cooperative union of the county (city, district), the rural cooperative bank or the rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of receipt of the entire application materials, make a written decision on ratification or refusal.

The application of the savings house within the jurisdiction of the city where the banking regulatory office is located for the initiation of business shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on ratification or refusal.

Article 103

A rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank shall, after receiving the ratification document for the initiation of business and obtaining a financial business permit, go to the administrative department for industry and commerce to obtain a business license.

A savings house shall initiate the business within 6 months as of obtaining the business license. In the case of any particular circumstance, the rural credit cooperative, the associate rural credit cooperative union of the county (city, district), the rural credit cooperative union of the county (city, district), the rural cooperative bank or the rural commercial bank shall, within 1 month prior to the expiry of the time limit for the initiation of business, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months.

Where the savings house fails to initiate its business within the prescribed time limit, the deciding organ shall nullify the license for the initiation of business, take back the ratification document for the initiation of business and the financial business permit, and make an announcement.

Section 7 Establishment of Self-help Banks of Cooperative Financial Institutions

Article 104

The term "self-help bank" shall refer to the unmanned business establishment of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank, which is out of the existing business places but in another independent business place and provides financial services such as currency deposit and withdrawal, grant of loans, account transfer, currency exchange, inquiry, etc., except for the automatic teller machines placed in department stores, hotels, enterprises, public institutions or other buildings for only providing services of currency deposit, account transfer and inquiry.

For the establishment of a self-help bank, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall meet the following conditions:

(1)

It has a sound rules and strong internal control capabilities, and had no illegal conduct, serious rule-breaking conduct or major case in the latest 2 years;

(2)

It has technologies and staff for providing the self-help bank services;

(3)

It has qualified business place, safety protection measures and other relevant facilities for its business; and

(4)

Other conditions on prudence as prescribed by CBRC.

None of the associate rural credit cooperative unions of the provinces (autonomous regions, municipalities directly under the Central Government) or of rural credit cooperative unions of the prefectures (cities) shall establish a self-help bank.

Article 105

An application for the establishment of a self-help bank within the jurisdiction of a banking regulatory branch office shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

The application for the establishment of a self-help bank within the jurisdiction of the city where the banking regulatory office is located shall be submitted by the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank, and be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 2 months as of the acceptance, make a written decision on approval or disapproval.

Article 106

A self-help bank shall initiate its business within 3 months as of approval. In the case of any particular circumstance, the self-help bank shall, within 1 month prior to the time limit for establishment, submit to the deciding organ the application for postponing the initiation of business. The deciding organ shall, within 20 days as of receipt of the written application, make a decision on whether to approve the postponement or not, and the maximum period postponed for the initiation of business shall be 3 months. If the self-help bank fails to initiate the business within the prescribed time limit, the deciding organ shall nullify the license for the establishment, take back the document on ratification of the establishment and the financial business permit, and make an announcement.

After a self-help bank is established, the rural credit cooperative, associate rural credit cooperative union of the county (city, district), rural credit cooperative union of the county (city, district), rural cooperative bank or rural commercial bank shall timely report the information on operation of the self-help bank, the internal control management and facilities, etc. to the deciding organ.

Chapter IV Modification of Institutions

Section 1 Modification of Legal Person Institutions

Article 107

Modifications of legal person institutions shall include: modification of name, modification of domicile, modification of organizational form, modification of stock rights, modification of registered capital, amendment of articles of association, division, merger, acquisition and temporary closedown, etc.

Article 108

Where a legal person institution modifies its name, the name shall indicate the words on the type of the institution, such as "credit cooperative", "associate union", "union", "rural cooperative bank" or "rural commercial bank", etc., and shall comply with the principles of uniqueness and protection of commercial credit standing.

Article 109

The modification of the name of a rural credit cooperative, associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The modification of the name of an associate rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The modification of the name of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural cooperative bank or a rural commercial bank within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The modification of the name of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 110

Where a legal person institution modifies its domicile, it shall have a qualified business place, safety protection measures and other relevant facilities for its business.

The scope of authority of administrative license for a legal person institution to modify its domicile and the time limit thereof shall be governed by Article 109 of the present measures.

Article 111

Where a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city) or a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) modifies its organizational form, or is reorganized into a rural cooperative bank or a rural commercial bank, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural cooperative banks or rural commercial banks.

Where a rural cooperative bank is reorganized into a rural commercial bank, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural commercial banks.

Where any other financial institution modifies its organizational form or is reorganized into a rural credit cooperative, it shall apply for the administrative license pursuant to the conditions and procedures for the establishment of rural credit cooperatives.

Article 112

Where a rural credit cooperative, an rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank modifies its equity structure (without modifying its registered capital), the qualification conditions for its members (shareholders) shall be the same as those prescribed in Article 9 , Article 11 and Article 13 of the present measures for initiators to hold shares.

Where a rural credit cooperative, a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank changes any member (shareholder) who holds no less than 5% of the total amount of capital or shares, it must be subject to examination and approval.

Where a rural credit cooperative or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office changes any member who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where a rural cooperative bank or a rural commercial bank within the jurisdiction of a banking regulatory branch office changes any shareholder who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where a rural credit cooperative, a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial banks within the jurisdiction of the city where the banking regulatory office is located changes any member (shareholder) who holds no less than 5% of the total amount of capital or shares, it shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Article 113

Where an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) plans to modify its equity structure, it shall meet the following conditions:

(1)

The assignment of stock rights by the associate rural credit cooperative union of a county (city, district) shall conform to Article 37 of the present measures;

(2)

The proportion of the stock rights assigned by the associate rural credit cooperative union of a prefecture (city), or the proportion of shares held by a single associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural cooperative bank or a rural commercial bank shall not exceed 10%, and the amount of its shares shall not exceed 50% of the paid-in capital; and

(3)

The assignment of stock rights by a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall conform to Article 47 of the present measures.

Where an associate rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office plans to change any member (by way of assignment of stock rights between rural credit cooperatives) who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and examination of the banking regulatory branch office for decision. The banking regulatory branch office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the banking regulatory branch office plans to change any member who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a county (city, district) or an associate rural credit cooperative union of a prefecture (city) within the jurisdiction of the city where the banking regulatory office is located plans to change any member (by way of assignment of stock rights between rural credit cooperatives) who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

Where an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) plans to change any member who holds no less than 5% of the total amount of capital or shares, the application shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 114

The assignment of stock rights to an overseas financial institution shall meet the conditions prescribed in Articles 15 and 16 of the present measures for initiators to hold shares.

The assignment of stock rights to an overseas financial institution shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 115

The scope of authority of administrative license for the increase of registered capital with common reserve or profits and the time limit thereof shall be governed by Article 109 of the present measures.

Article 116

Where a legal person institution modifies its registered capital by allotment of shares, its share allotment scheme shall be subject to the examination and approval prior to the modification of the registered capital.

The qualifications of the members (shareholders) and the stock capital structure after the allotment of shares shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

The examination and approval of the share allotment scheme, the scope of authority of administrative license for modification of the registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

Article 117

Where a legal person institution plans to modify its registered capital by raising new shares, the share raising scheme shall be subject to the examination and approval prior to the modification of the registered capital.

The qualifications for members (shareholders) and the stock capital structure after the raise of new shares shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

The examination and approval of the share raising scheme, the scope of authority of administrative license for modification of the registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

The application for domestic or overseas listing or for an overseas financial institution to hold the shares shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Article 118

Where a legal person institution plans to decrease its registered capital, the scheme on decrease of registered capital shall be subject to examination and approval prior to the modification of the registered capital.

The decrease of registered capital shall meet the following conditions:

(1)

The registered capital after the modification shall meet the requirement on minimum registered capital;

(2)

After the modification of the registered capital, the capital adequacy ratio and other regulatory indices shall conform to prudential management rules;

(3)

After the modification of the registered capital, the qualifications for members (shareholders) and the stock capital structure shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures;

(4)

The registered capital shall not be decreased in case of deficiency in the last year; and

(5)

The decrease of registered capital meets legal procedures.

The examination and approval of the scheme on the decrease of registered capital, the scope of authority of administrative license for modification of registered capital and the time limit thereof shall be governed by Article 109 of the present measures.

Article 119

Where a legal person institution plans to amend its articles of association, its scope of authority of administrative license and the time limit thereof shall be governed by Article 109 of the present measures.

Where a legal person institution's modification of its name, domicile, stock rights or registered capital upon approval of CBRC or any of Cork's dispatched offices involves amendment of the articles of association, the legal person institution shall, within 3 months after the deciding organ makes the decision on approval, submit the amended articles of association to the deciding organ for archival filing.

Article 120

The split-up of a legal person institution shall meet the following conditions:

(1)

The split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The split-up of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The legal person institution shall meet the requirements on minimum registered capital after the split-up;

(4)

The legal person institution's capital adequacy ratio and other regulatory indices after the split-up conform to prudential management rules;

(5)

The qualifications and number of members (shareholders) as well as the stock capital structure after the split-up shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures; and

(6)

The legal person institution meets other conditions for the establishment of legal person institutions.

The application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for split-up of an associate rural credit cooperative union of a prefecture (city), or of an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The application for split-up of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where, after the split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the successor is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures; while the newly established party shall apply for administrative license pursuant to the conditions and procedures for the legal person institution to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution.

Where, after expiry of the time limit for announcement of the division of a rural commercial bank, the successor is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures. The newly established party shall apply for an administrative license pursuant to the conditions and procedures for the legal person institution to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution.

Article 121

The split-up of a legal person institution shall meet the following conditions:

(1)

The split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The split-up of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The legal person institution shall meet the requirements on minimum registered capital after the split-up;

(4)

The legal person institution's capital adequacy ratio and other regulatory indices after the split-up shall conform to prudential management rules;

(5)

The qualifications and number of members (shareholders) as well as the stock capital structure after the split-up shall meet the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures; and

(6)

The legal person institution meets other conditions for establishment of legal person institutions.

An application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

The application for split-up of an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for split-up of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

After the split-up of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the newly established party shall apply for an administrative license pursuant to the conditions and procedures for legal person institutions to initiate the business. The subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution. The former legal person institution shall apply for administrative license pursuant to conditions and procedures for dissolution of legal person institutions, and timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

After expiry of the time limit for announcement the division of a rural commercial bank, the newly established party shall apply for the administrative license pursuant to the conditions and procedures for legal person institutions to initiate its business, and the subordinate non-legal-person institution may be renamed once for all as non-legal-person institution of the newly established institution. The former legal person institution shall apply for the administrative license pursuant to the conditions and procedures for dissolution of legal person institutions, and timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Article 122

The merger of a legal person institution shall meet the following conditions:

(1)

The merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), a rural credit cooperative union of a prefecture (city), a rural credit cooperative union of a province (autonomous regions municipality directly under the Central Government), or a rural cooperative bank shall be implemented with reference to the "Company Law of the People's Republic of China" and other relevant provisions;

(2)

The merger of a rural commercial bank shall conform to the "Company Law of the People's Republic of China" and other relevant provisions;

(3)

The merging party's capital adequacy ratio and other regulatory indices after the merger shall conform to prudential management rules;

(4)

The qualifications for members (shareholders) and the stock capital structure after the merger shall conform to the conditions prescribed in Articles 9 through 16, Article 37 and Article 47 of the present measures.

An application for the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of a banking regulatory branch office shall be subject to the acceptance and preliminary examination of the banking regulatory branch office, and be subject to the examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

An application for the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district) or a rural credit cooperative union of a county (city, district) within the jurisdiction of the city where the banking regulatory office is located shall be subject to the acceptance and examination of the banking regulatory office for decision. The banking regulatory office shall, within 3 months as of the acceptance, make a written decision on approval or disapproval.

An application for the merger of an associate rural credit cooperative union of a prefecture (city), or an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

The merger of a rural cooperative bank or a rural commercial bank shall be subject to the acceptance and preliminary examination of the banking regulatory office, and be subject to the examination of CBRC for decision. CBRC shall, within 3 months as of receipt of the entire application materials, make a written decision on approval or disapproval.

Where, after the merger of a rural credit cooperative, an associate rural credit cooperative union of a county (city, district), a rural credit cooperative union of a county (city, district), an associate rural credit cooperative union of a prefecture (city), an associate rural credit cooperative union of a province (autonomous region, municipality directly under the Central Government) or a rural cooperative bank is approved, the merging party is changed, it shall apply for an administrative license pursuant to the modification conditions and procedures. If the merged party needs to be reconstructed into a non-legal-person institution after dissolution, it shall apply for the administrative license pursuant to the conditions and procedures for renaming non-legal-person institutions, and the subordinate non-legal-person institution may be renamed once for all as the merging party's non-legal-person institution. When the merged party is dissolved, it shall timely go to the administrative department for industry and commerce to go through the procedures for nullification registration.

Where, after expiry of the time limit for announcement the merger of a rural commercial bank, the merging party is changed, it shall apply for administrative license pursuant to the modification conditions and procedures. If the merged party needs to be reconstructed into a non-legal-person institution after the dissolution, it shall apply for the administrative license pursuant to the conditions and procedures for renaming non-legal-person institutions, and the subordinate non-legal-person institution may be renamed once for all as the merging party's non-legal-person institution. When the merged party is dissolved, it shall timely go to the administrative department for industr