贷款通则（二）

Data on bad loans shall be provided by the accounting and credit departments. The auditing department shall be responsible for verification of the data and， in line with the stipulated limits of its authority， for confirmation of the loans as bad loans. The lender shall fill in and submit a quarterly statement on bad loans. At the same time as the statement is submitted to the superior bank， such statement shall also be submitted to the local branches of the People's Bank of China.

Article 36　Inspection of bad loans：

The dead loans， idle loans and overdue loans of a lender may not exceed the percentages stipulated by the People's Bank of China. The lender shall give relevant instructions to its branch organizations on the relevant quotas for dead loans， idle loans and overdue loans.

Article 37　Calling in bad loans and writing off dead loans：

The credit department shall be responsible for calling in bad loans and the auditing department shall be responsible for inspection of calling in bad loans. The lender shall make allocations to a reserve for bad debts in accordance with relevant provisions of the State， and shall write off dead loans in accordance with the conditions and procedures for writing off dead loans.

Without the approval of the State Council， a lender may not cancel loans. Except with the approval of the State Council， no work unit or individual may forcibly demand a lender to cancel a loan.

PART EIGHT　RESPONSIBILITY SYSTEM FOR THE ADMINISTRATION OF LOANS

Article 38　Bank presidents （hereafter referring to managers or supervisors） shall be responsible for the administration of loans.

Loans shall be subject to administration at different levels and bank presidents at different levels shall be fully responsible for the granting and recovery of loans within the scope of their authorization. A bank president may authorize a deputy bank president or loan administration department to take responsibility for examining and approving loans. The deputy bank president or responsible person of the loan administration department shall be accountable to the bank president.

Article 39　The organizations of a lender at each level shall establish a Loan Examination Committee （Team） in which the bank president or deputy bank president （hereafter referring to managers or supervisors） and the responsible persons of the relevant departments shall participate， which shall be responsible for the examination of loans.

Article 40　Establishment of separate systems for the examination and approval of loans：

The loan investigation and appraisal personnel shall be responsible for the investigation and appraisal of loans and be liable for erroneous investigation and appraisals. The loan investigation and appraisal personnel shall be responsible for examining loan risks and be liable for mistakes in examination. The loan provision personnel shall be responsible for the inspection and full recovery of loans， and shall be liable for mistakes in inspection and slackness in the full recovery of loans.

Article 41　Establishment of a system for examination and approval of loans at different levels：

Lenders shall determine the limits of the examination and approval authority of their branches at each level in accordance with their business volume， standard of administration and the loan risk factor， and shall report loans beyond their examination and approval authority to a higher level for examination and approval. The branches at each level shall determine the risk factor of each loan in accordance with the circumstances， such as the type of loan， the credit rating of the borrower， the mortgaged property， the pledged item and the guarantor.

Article 42　Establishment and improvement of a system of personal responsibility for credit work：

The loan administration departments at each level shall assign responsibility for detailed management of loans to the departments， positions and individuals， and shall strictly define the duties of the credit personnel at each level.

Article 43　The lender shall establish an in-house credit personnel system at factories for borrowers of large sums of money.

Article 44　Establishment of an auditing system for vacated posts：

When loan administration personnel vacate their original posts， an audit shall be conducted concerning the loan risk situation of all loans granted during such tenure of office and within the limits of authority of such personnel.

PART NINE　ADMINISTRATION OF THE PRESERVATION OF LOANS CLAIMS AND THE REPAYMENT OF LOAN OBLIGATIONS

Article 45　A borrower may not violate the provisions of the law and use a merger， bankruptcy or restructuring of a share system enterprise to channel and evade bank claims and misappropriate credit funds. A lender may not use contracting or leasing arrangements to channel and evade the lender's credit supervision or the obligation to repay the principal and interest thereon of a loan.

Article 46　The lender has the right to participate in the debt restructuring of a borrower in the process of a merger， bankruptcy or restructuring of a share system enterprise， and shall require the borrower to fulfil repayment of loan principal and interest matters.

Article 47　A lender shall require a borrower that is to contract or lease out his or its business to specify fulfilment of repayment liability for the original loan obligation in the contracting or leasing contract.

Article 48　A lender shall require a borrower that is to undergo a share system restructuring to establish a new loan contract to specify the repayment liability for the original loan obligation.

The lender shall require that， the company that results from a borrower who is undergoing a complete share system restructuring， once restructured， becomes fully liable for the owed obligation. For a borrower undergoing partial share system restructuring， the lender shall require the share structure company that results from the restructuring to bear liability for the original loan based on the proportion of the capital funds or assets of the borrower that such enterprise holds.

Article 49　A lender shall require a borrower that is to engage in a joint operation that results in the formation of a new enterprise legal person， to transfer fulfilment of the loan obligation to the new enterprise legal person in proportion to the capital funds or assets of the borrower to be held by such enterprise.

Article 50　A lender shall require a borrower that is to be merged （merged by takeover） to repay the loan obligation or provide corresponding security before merger （merger by takeover）。

If a borrower does not repay the loan obligation or provide corresponding security， the lender shall require the enterprise merging （merging by takeover） or the new enterprise arising from a merger to bear responsibility for repayment of the loan owed by the original borrower， and shall establish a relevant new contract or agreement.

Article 51　A lender shall require a borrower that is to set up an equity （co-operative） joint venture with a foreign partner to continue to be liable for repaying the loan obligations taken out prior to the establishment of such equity （co-operative） joint venture， and shall require all proceeds obtained to be applied first to the repayment of the loan. A borrower that wishes to use property already mortgaged or pledged for a loan to set up an equity （co-operative） joint venture with a foreign partner must seek the consent of the lender.

Article 52　A lender shall require a borrower that is to undergo demerger to repay the loan obligation or provide corresponding security before demerger.

Where a borrower does not repay the loan obligation or provide corresponding security， the lender shall require each enterprise resulting from the demerger to be liable for repayment of the loan owed by the original borrower in proportion to the capital or assets held at the time of demerger， or as agreed. Where a borrower establishes a subsidiary， the lender shall require such subsidiary to bear and repay the corresponding loan obligation of the parent company in proportion to the capital or assets received.

Article 53　A lender shall require a borrower that is to assign property rights for compensation or apply for dissolution to fulfil repayment of loan obligations prior to assignment of property rights for compensation or dissolution.

Article 54　A lender shall participate， in accordance with relevant laws， in the determination of a bankrupt borrower's property and the disposal of his or its claims and obligations. For loan claims which a bankrupt borrower has already secured with a mortgage or pledge of property or otherwise， the lender shall enjoy receipt of repayment on a priority basis， in accordance with the law. Repayment of loan claims not secured by property shall be obtained in accordance with the statutory procedures and ratios.

PART TEN　SPECIAL PROVISIONS FOR THE ADMINISTRATION OF LOANS

Article 55　Establishment of loan organizers systems：

A borrower shall establish a loan organizer relationship with the lender with which he or it has opened his or its basic account， in accordance with the provisions of the People's Bank of China.

Where a borrower is to undergo a major economic activity involving the usage or security of credit funds， such as enterprise demerger， restructuring of a share system enterprise or construction of a major project， such borrower shall seek the opinion of his or its loan organizer in advance. One borrower may only have one loan organizer， and the loan organizer shall make alterations according to alterations made in a borrower's basic account.

A loan organizer shall not guarantee capital， but shall provide loans to a borrower in a planned manner in accordance with regulations， and provide necessary financial services such as information， advice and agency to the borrower.

Loan organizer systems and implementing procedures shall be stipulated elsewhere by the People's Bank of China.

Article 56　For syndicated loans， one lender shall be designated as the lead bank， and a syndicated loan agreement specifying the rights and obligations of each lender shall be entered into. The members of the bank syndicate shall jointly assess and examine the loan project. The lead bank shall supervise the repayment of the loan according to the specified ratio. Administration procedures for syndicated loans shall be separately stipulated by the People's Bank of China.

Article 57　Management of specially designated loans：

Wholly State-owned commercial banks shall grant and manage specially designated loans in accordance with the provisions of the State Council.

Administration procedures for specially designated loans shall be separately stipulated.

Article 58　The type， subject and scope of loans by non-banking financial institutions shall comply with the provisions of the People's Bank of China.

Article 59　If a lender grants a loan to another locality， or accepts deposits from another locality， it shall report such matter to the local branch of the People's Bank of China for the record.

Article 60　Credit funds may not be used for financial expenditures.

Article 61　No administrative authorities， units of enterprises or institutions at any level， economic co-operative organizations such as supply and sales co-operatives， rural co-operative foundations or other foundations may engage in financial business， such as deposit or loan business. No financing business involving lending or borrowing， or lending and borrowing in a disguised form， may be handled between enterprises in violation of State provisions.

PART ELEVEN　PENALTIES

Article 62　Where a lender grants a loan in violation of the provisions regarding the administration of debt-equity ratios， the People's Bank of China shall order rectification and impose a fine， in accordance with Article 75 of the PRC， Commercial Banking Law. Where there is illegal income， such illegal income shall be confiscated， and disciplinary sanctions shall be imposed on the directly responsible personnel in charge and other directly responsible personnel， in accordance with Article 76 of the PRC， Commercial Banking Law.

Article 63　Where a lender grants fiduciary loans to connected parties or grants secured loans to connected parties on conditions that are more preferential that those for granting the same type of loan to other borrowers in violation of provisions， disciplinary sanctions shall be imposed in accordance with Article 74 of the PRC， Commercial Banking Law， and disciplinary sanctions shall be imposed on relevant directly responsible personnel in accordance with Article 76 of the PRC， Commercial Banking Law.

Article 64　Where the personnel of a lender fails to refuse forcible demands by a work unit or individual to grant a loan or provide a guarantee or security， disciplinary penalties shall be imposed in accordance with Article 85 of the PRC， Commercial Banking Law， and where losses are caused， such personnel shall bear corresponding liability for compensation.

Article 65　Where relevant responsible personnel of a lender violate relevant regulations of these General Provisions， disciplinary penalties and fines shall be imposed. In serious cases or in the case of repeat offences， such personnel shall be dismissed from their posts， and their qualifications for such posts shall be cancelled. Where serious economic losses are caused or where the matter constitutes another economic crime， criminal liability shall be pursued in accordance with relevant laws and regulations.

Article 66　Where any of the following circumstances arise with regard to a lender， the People's Bank of China shall order rectification， and where rectification is not made within the specified time， the People's Bank of China may impose a fine of between Rmb 5，000 and Rmb 10，000：

1. Failure to publicly announce the type， term and interest rate of a loan handled by the lender；

2. Failure to publicly disclose the conditions for granting a loan or the particulars required to be examined when a loan is granted； or

3. Failure to reply to a borrower's loan application within the specified time.

Article 67　Where any of the following circumstances arise with regard to a lender， the People's Bank of China shall order rectification. Where there is illegal income， such illegal income shall be confiscated and a fine of between one time and three times the amount of the illegal income shall be imposed. Where there is no illegal income， a fine of between Rmb 50，000 and Rmb 300，000 shall be imposed. Where the matter constitutes a crime， criminal liability shall be pursued in accordance with the law：

1. A lender advances funds for an entrusted loan in violation of provisions；

2. A lender grants a foreign currency loan to a natural person without the approval of the People's Bank of China； or

3. A lender， in violation of the provisions of the People's Bank of China， collects any additional fees other than the interest to be calculated and collected for a loan on one's own account or for a specially designated loan， or collects any additional fees other than the handling fees to be calculated and collected for an entrusted loan.

Article 68　Where any work unit or individual forcibly demands a bank to grant a loan or provide a guarantee or security， the directly responsible personnel in charge， or other directly responsible personnel or individual shall be subject to disciplinary sanctions in accordance with Article 85 of the PRC， Commercial Banking Law. Where economic losses are caused， such personnel shall bear all or part of the compensation liability.

Article 69　Where a borrower uses deceptive practices to fraudulently obtain a loan， and the matter constitutes a crime， a fine shall be imposed and criminal liability shall be pursued in accordance with laws and regulations and with Article 80 of the PRC， Commercial Banking Law.

Article 70　Where a borrower violates the provisions of Article 45 in Part 9 of these General Provisions and deliberately uses such methods as a merger by takeover， bankruptcy or restructuring of a share system enterprise to misappropriate credit funds， such borrower shall bear corresponding liability for compensation and shall be subject to a fine in accordance with relevant laws and regulations. Where major economic losses are caused to the lender， criminal liability shall be pursued against the directly responsible personnel in accordance with relevant laws and regulations.

Where a borrower violates other the provisions of other articles of Part 9 of these General Provisions and causes failure of payment of a loan obligation， the lender shall cease to provide new loan funds and recover loan funds that have already been provided ahead of the term. Where losses are caused to the credit loan assets， the borrower and its personnel-in-charge or other individuals shall bear all or part of the liability for compensation. Before such liability for compensation is fulfilled， no other lenders may grant a loan to such borrower.

Article 71　Where any of the following circumstances arise regarding a borrower， a lender shall charge additional interest on all or part of his or its loan. Where the circumstances are particularly serious， the lender shall stop payment to the borrower of the part of the loan which he or it has not yet used， and recover all or part of the loan ahead of the term：

1. A borrower fails to use the loan in accordance with the purpose specified in the loan contract；

2. A borrower uses the loan to conduct equity investments；

3. A borrower uses the loan to engage in speculation in areas such as securities or futures；

4. A borrower that has not lawfully obtained qualifications to engage in property business uses the loan to engage in property business； or a borrower that has lawfully obtained qualifications to engage in property business uses the loan to engage in property speculation；

5. A borrower does not repay the loan principal with interest thereon in accordance with the provisions of the loan contract； or

6. A borrower diverts loan funds in order to seek illegal profit by on-lending.

Article 72　Where any of the following circumstances arise regarding a borrower， the lender shall order rectification. Where the circumstances are particularly serious or rectification is not made within a specified time limit， the lender shall stop payment to the borrower of the part of the loan which he or it has not yet used， and recover all or part of the loan ahead of the term：

1. A borrower provides the lender with false information or withholds major information such as balance sheets， profit and loss accounts， etc.；

2. A borrower fails to provide true information to the lender concerning the banks with which he or it has opened accounts， the account numbers， deposit balances， etc.； and

3. A borrower refuses to be subject to the lender's supervision of his or its use of the credit funds and of relevant production， operation and financial activities.

Article 73　Where administrative authorities， units of enterprises or institutions， share system co-operative economic organizations， supply and sales co-operatives， rural co-operative foundations or other foundations grant loans without authorization， or where enterprises engage in lending and borrowing or lending and borrowing in a disguised form between themselves without authorization， the People's Bank of China shall impose a fine on the lender of between one time and five times the income gained in violation of provisions， and the People's Bank of China shall suppress the activity.

Article 74　Where a party is dissatisfied with a penalty decision of the People's Bank of China， he or it may apply for a review in accordance with the provisions of the People's Bank of China， Administrative Review Procedures （Trial Implementation）。 During the review period， the original penalty shall continue to be implemented.

PART TWELVE　SUPPLEMENTARY

Article 75　Loan administration procedures for State policy banks， foreign investment financial institutions （including wholly foreign-owned financial institutions， Sino-foreign equity joint venture financial institutions and branches of foreign investment financial institutions） shall be separately stipulated by the People's Bank of China.

Article 76　Administration procedures regarding exterior security for foreign government loans， export credit， subsidized interest loans by foreign businesses or export credit projects， or international commercial loans connected with the above loans shall be separately stipulated by the People's Bank of China.

Article 77　Lenders may formulate implementing rules in accordance with these General Provisions and report the same to the People's Bank of China for the record.

Article 78　From the date on which these General Provisions are implemented， in case of conflict between these General Provisions and any rules and regulations previously formulated by the People's Bank of China and lenders， these General Provisions shall prevail.

Article 79　The People's Bank of China shall be responsible for the interpretation of these General Provisions.

Article 80　These General Provisions shall be effective as of 1 August 1996.