Circular of the People's Bank of China on Printing and Distributing the Administrative Measures for Bank Card Business
Circular of the People's Bank of China on Printing and Distributing the Administrative Measures for Bank Card Business
Circular of the People's Bank of China on Printing and Distributing the Administrative Measures for Bank Card Business
Yin Fa [1999] No.17
January 5, 1999
The branches, business administration departments, regulatory offices, provincial (capital) city branches and Commercial Banks,
Administrative Measures for Bank Card Business is now printed and distributed to you for your conscientious compliance and implementation.
Appendix:
Administrative Measures for Bank Card Business
Chapter I General Provisions
Article 1 These Measures are enacted in accordance with the Law of the People's Republic of China on the People's Bank of China, the Law of the People's Republic of China on Commercial Banks, the Administrative Regulations of the People's Republic of China on Foreign Exchange and related administrative laws and regulations in order to enhance the administration and prevent risks in bank card business and to safeguard the lawful rights and interests of commercial banks, cardholders, specially engaged merchants and other parties concerned.
Article 2 Bank cards as referred to in these Measures are credit payment instruments issued by commercial banks (including postal financial institutions, similarly hereafter) to the society, which have some or all functions such as consumption credit, transfer and clearing of cash and depositing and withdrawing cash, etc.
No commercial bank may issue any bank card without the approval of the People's Bank of China.
Article 3 All commercial banks, cardholders and merchants handling the bank card business within the territory of the People's Republic of China and other parties concerned shall abide by the provisions of these Measures.
Article 4 Commercial banks shall, on the basis of negotiation and mutual benefit, carry out sharing of information, merchants, and transaction equipment? and other types of combination in bank card business.
Chapter II Categorization and Definition
Article 5 Bank cards are divided into credit cards and debit cards.
Bank cards may be divided into Renminbi cards and foreign currency cards according to the type of currency; business cards (commercial cards) and individual cards according to the objective of issuance; and
magnetic cards and integrated circuit (IC) cards according to the information carrier.
Article 6 Credit cards may be divided into credit cards and quasi-credit cards subject to whether an imprest has been deposited with the card-issuing bank.
Credit card permits the cardholder to make purchases without cash payment within the credit limit granted by the card-issuing bank.
Quasi-credit card requires the cardholder to deposit a certain amount of imprest with the card-issuing bank in advance as provided for by the bank, and permits the cardholder to overdraw when the balance in the imprest account is not sufficient to pay, but within the credit limit provided for by the card-issuing bank.
Article 7 Debit cards may be divided into three type of cards: cards for transferring accounts (including savings cards, similarly hereinafter), cards for special purposes and stored-value cards. Overdraft facility is not included in the function of the debit cards.
Article 8 Cards for transferring accounts are forms of debit cards, which allows real-time deduction from checking or savings accounts. Its functions comprise transfer, settlement, depositing, withdrawing cash, and making purchases.
Article 9 Cards for special purposes refers to debit cards which can be used in designated location for any special purpose. Its functions comprise transfer, settlement, depositing and withdrawing cash.
Special purpose means that it shall be used other than in the industries of general merchandise, catering, restaurant and entertainment.
Article 10 Stored-value cards are cash cards which require payment in advance. The money of the cardholder is transferred into this card by the card-issuing bank as required by the cardholder, and then when a transaction is made, the money is deducted from the card.
Article 11 Co-branded/affinity cards are supplementary products of a bank card issued by a commercial bank in cooperation with a profitable/non-profitable institution. The category of the bank card it supplements must be of a category approved by the People's Bank of China and the issuance and operation of the said category of the bank card shall comply with the business regulations or administrative measures accordingly.
The card-issuing bank and the co-branded merchants shall agree to a certain discount or special services for the cardholders for purchases from any of the co-branded merchants. Affinity card holders indicate their support to affiliated organizations by applying for and using the affinity cards.
Article 12 Integrated circuit (IC) cards may be applied to a single category of bank cards, and as well as a combined category of bank cards as well.
Chapter III Examination and Approval of Bank Card Business
Article 13 Any commercial bank developing bank card business shall meet the following requirements as follows:
1. it should be opened for three years or more and have a sound foundation for handling retail business;
2. it should comply with the indicators as issued by the People's Bank of China for asset-liability ratio administration and supervision and it shall have sound business performance;
3. an impeccable internal quality audit system must be set up for this business with specific procedures for the inspection of internal approval procedures;
4. it should have qualified management, technical personnel and administrative department accordingly;
5. it should have a safe and efficient computer processing system;
6. it should have the qualification for developing foreign exchange business and it should have corresponding operational and administrative expertise for foreign exchange business in case of issuing of any foreign currency card;
7. other requirements as provided for by the People's Bank of China.
Article 14 A commercial bank satisfying the aforesaid requirements may apply for developing bank card business with the People's Bank of China and shall submit the following items:
1. an application report presenting the necessity, feasibility and market forecasts of the business
2. statutes or by-laws, or administrative measures for the bank card, draft card designs;
3. internal quality audit system and risk prevention measures;
4. a testing report concerning the security of the system and qualified technical standards as issued by the relevant departments of science and technology of the People's Bank of China;
5. other items as required by the People's Bank of China.
Article 15 The statutes or by-laws of any bank card of a card-issuing bank shall indicate the following items:
1.
......