China Banking Regulatory Commission, Administration of Auto Finance Companies Procedures Implementing Rules

Promulgated: November 12 2003
Effective: as of date of promulgation
Interpreting authority: China Banking Regulatory Commission

Main contents: The Implementing Rules state that an application for establishment of auto finance companies consists of the application for establishment preparation and the application for commencement of business (Article 3). Part Three of the Implementing Rules covers the administration of the qualifications of senior management personnel, including directors, supervisors, general manager, deputy general manager, financial controller, and manager of the internal audit or audit department. Part Four concerns risk control and regulation. Auto finance companies shall establish operating rules for classification of risk assets and a prudential bank loan loss provisioning system (Article 37). Article 44 stipulates that the outstanding balance of loans of a single shareholder and its affiliated party shall not exceed 100% of the amount of capital contribution of the shareholder in the auto finance company. The outstanding balance of loans is the balance after the deduction of the amount secured by the borrower's cash and cash equivalents (Article 45).
Related legislation: Administration of Auto Finance Companies Procedures, Oct 3 2003, CLP 2003 No.9 p34; Classification of Loan Risk Guiding Principles (Trial Implementation), Apr 20 1998 and Bank Loan Loss Provisioning Guidelines, Apr 25 2002, CLP 2002 No.5 p5