Circular of the Ministry of Finance on Matters concerning the Enhancement of Financial Supervision over Financial Enterprises

Circular of the Ministry of Finance on Matters concerning the Enhancement of Financial Supervision over Financial Enterprises

Cai Zhai Zi [1999] No.217

October 29, 1999

The Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, CITIC Industrial Bank, China Everbright Bank, China Merchants Bank, China Minsheng Bank, China Huarong Asset Management Corporation, China Great Wall Asset Management Corporation, China Xinda Asset Management Corporation, China Orient Asset Management Corporation, China International Trust and Investment Corporation, China Everbright Trust and Investment Corporation, China Nationalities International Trust and Investment Corporation, China Economic Development Trust and Investment Corporation, China Golden Valley Trust and Investment Corporation, China Coal Trust and Investment Corporation, China Coal Trust and Investment Corporation, China Science and Technology Trust and Investment Corporation, China Education Trust and Investment Corporation, the financial departments (bureaus) of the provinces, autonomous regions, municipalities directly under the central government, and the cities specifically designated in the state plan,

In order to enhance financial supervision over financial enterprises, improve their ability of business operation and management, increase proceeds and guard against financial risks, we hereby clarify the relevant matters concerning the enhancement of financial supervision over financial enterprises as follows:

I. All financial enterprises must, in accordance with the Financial Rules for Financial Enterprises as well as the relevant regulations of the state, fully reflect the assets and liabilities of the enterprise, correctly create accounts of income and expenditure, improve the internal control system and enhance financial management of the enterprise. All financial enterprises must, in accordance with the Rules for Management over Costs of Financial Enterprises in Separate Accounts (Cai Zhai Zi [1998] No.69), establish a management system for cost accounts, establish reasonable cost indicators and strengthen cost management. All financial enterprises must strictly comply with the relevant financial rules, regulations, and disciplines of the state and shall be subject to supervision and administration by financial authorities at various levels.
All state-owned commercial banks must submit financial plans and financial statements to the relevant authorities on schedule according to the Rules for Financial Management of State-owned Commercial Banks (Cai Shang Zi [1997] No.43). All branches of state-owned commercial banks shall be subject to supervision and administration by the financial supervision commissioner offices of the Ministry of Finance stationed in the provinces, autonomous regions, municipalities, and those cities specifically designated in the state plan.

II. Interests receivable and interests payable must be calculated in accordance with relevant rules and regulations. All financial enterprises must, in accordance with the accrual system and the relevant financial rules, calculate and reserve interests receivable and interests payable. Accounting for various types of loan interests must be consistent with the standards established by the People's Bank of China.
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