On the Promotion of Banking Financial Institutions and Financing Guarantee Agencies Business Cooperation.

CBRC issued document No. [2011] 17

    All banking regulatory bureaus, policy banks, state-owned commercial banks, joint-stock commercial banks, financial asset management companies, postal savings banks, and provincial rural credit cooperatives, trust companies directly regulated by the CBRC, enterprise group finance companies, financial leasing companies:

 

    1. Sufficient understanding significance on strengthening the cooperation of banks and guarantee agencies. To strengthen the cooperation of banks and guarantee agencies is an important measure for the banking financial institutions to promote economic and social development, alleviate the loan difficulty for the small companies and “Three Rural ", is conducive for the banking financial institutions to expand their business areas, to control business risks. All banking financial institutions should change their concepts, on the basis of risk control and following market principles, to take effective measures to further strengthen banks and guarantee agencies cooperation.

 

    2. Adept in using the financing guarantee agencies’ credit functions. through strengthening banks and guarantee agencies cooperation, expand their business areas, improve the financial services to small business and" Three Rural ", to cultivate new business and profit growth.

 

    3. Pay great attention to examination on the financing guarantee agencies’ qualification. Since March 31, 2011, banking financial institution shall take financing guarantee agencies holding a business license as a necessary condition for cooperation, and on the basis of guarantee agency corporate governance, risk management, compliance business operations as well as capital, credit, operational performance and the actual situation to determine the depth and scope of cooperation.

 

    4. Establish a suitable business model for the feature of the financing guarantee agencies insured loans (hereinafter referred to as insured loans), to introduce credit products which meet the needs of small business and operating characteristics, and further optimize the approval process, improve the efficiency of the insured loan’s approval, issuance.

 

    5. Reasonably determine the loan interest rate. In insured loan, banking financial institutions shall, in accordance with the relevant policies, implement relevant preferential interest rate policy for small business loans," Three Rural " loans, "the people's livelihood" project loans and strategic emerging industries loans.

 

    6. Committed to the long-term stable cooperation with the financing guarantee agencies. Both sides should buildup a fair and honest, and mutually beneficial cooperation relationship according to market principles, and consensus, expressly agreed in the contract to assume responsibility for guarantee. Banking financial institutions shall provide the necessary assistance for the financing guarantee agencies in recovery activities after compensation. Among the banking financial institutions, they shall strengthen the communication and information sharing; the basic principle is the financing guarantee liability total balance by not more than 10 times its net assets.

 

    7. Strictly implement the guarantee loan management system. Conscientiously do a superior “three checks" work on loans, strengthen loan tracking, continuous dynamic monitoring on the flow of credit funds and its use and make risk analysis, early warning and prevention work.

 

    8. Strengthen the communication of information with the financing guarantee agencies. In the process of cooperation, both sides should timely sharing of project operation and risk early warning information, together to develop the risk prevention and control work. Banking financial institutions shall actively provide assistance and convenience on checking and confirming the relevant information for financing guarantee agencies and regulatory authorities in accordance with the law.

 

    9. Timely grasp of the financing guarantee industry dynamic information. Including change of policy and regulatory developments, actively pay attention to the financing security industry environment construction, risk compensation mechanism and the relevant state supportive policies, that will effect the industry development, strengthen the financing guarantee industry operation analysis, accurately and well know both sides’ business cooperation trend.

 

    10. To promote fair and equitable guarantee industry environment construction. Banking staff must abide by the occupation morals, project responsible person and approval personnel should actively avoid in this situation, such as when there is a benefit-based relationship with cooperated financing guarantee agencies or guarantee projects. Works of banking financial institutions shall not have a part-time job in the financing guarantee agencies, shall not take advantage of his position to make business cooperation with relatives and other people with benefit-based relationship who invest or the actual control of the financing guarantee agencies, shall not use the powers of command to make a cooperation with a particular financing guarantee agencies.

 

    All banking regulatory bureaus shall fully understand and grasp their financing guarantee industry and financing guarantee agencies business development, closely monitoring the guarantee loan risk and main problem, and report the relevant information about banking financial institutions within their respective jurisdictions, and send a copy to the local financing guarantee agencies regulatory department, and take effective measures to promote their banks and guarantee agencies’ cooperation in health stable development.

 

    Each banking regulatory bureau shall forward this notice to of the banking regulatory branch office and the banking financial institutions under their jurisdiction

 

February 27th 2011