Yin Fa (2008) No.225
The People’s Bank of China (PBC) Shanghai Head Office, all branches, business management departments, central branches in capital cities of all provinces; banking regulatory bureaus, securities regulatory bureaus and insurance regulatory bureaus in all provinces (autonomous regions and municipalities directly under the Central Government); all policy banks, state-owned commercial banks, joint-stock commercial banks and Postal Savings Bank of China,
In accordance with the “Opinions of the State Council on Policies and Measures for Wenchuan Post-quake Reconstruction and Restoration” (Guo Fa [2008] No.21), the following opinions are issued to give play to the financial functions and provide financial supports and services for the reconstruction in an all-round way:
1. Efforts should be made to help the quake-hit financial institutions to restore and upgrade financial services as soon as possible.
(1) Restoration and Reconstruction of Financial Institutions’ Grassroots Branches
In accordance with the overall planning of the State Council on the reconstruction, the layout and reconstruction of financial institutions’ grassroots branches in the quake areas should be planned in a reasonable way to provide more financial services as well as restore and upgrade the services as soon as possible.
All banks as well as securities and insurance institutions damaged by the earthquake should be restored in time, and financial services for quake survivors’ temporary shelters should be especially improved. Regarding financial institutions with minor damages and those still capable of providing basic services, necessary policy supports should be offered to help them resume normal business. As for those institutions with heavy damages and those incapable of providing normal services, if they are branches of nationwide financial institutions, their headquarters should allocate resources for restoration and work out detailed plans; if they are corporate financial institutions, powerful financial institutions in steady operation are encouraged to merge and restructure them in the market-oriented principle. Meanwhile, local governments are encouraged to support the restoration of the corporate financial institutions by financial capital according to relevant policies.
Banking financial institutions are supported to set up temporary business branches on the basis of safe operation and provide cross-institutional agency service through system alteration. Investors are guided to adopt off-site trading by ways of online trading or telephone entrustment. To meet clients’ requirements of spot trading, trusteeship or designation transfer are also adopted.
Banks, as well as securities and insurance institutions are encouraged to set up branches in the quake-hit areas on the premise of effective risk control. Priority should be given to examination on the relocation and restructuring of eligible financial institution’ grassroots branches. Also such institutions are encouraged to conduct innovation of financial products and services.
(2) Systems of payment settlement, treasury, currency issue, securities trading and postal remittance should be in safe operation.
Dynamic monitoring on the payment settlement system should be strengthened, and the “Green Access” should be available to ensure the smooth remittance of the reconstruction capital. Such machines as ATM and POS should be reasonably set up in quake survivors’ temporary shelters for the convenience of cardholders’ deposit, withdrawal and consumption. In addition, the channel for treasury capital transfer should be ensured and extended to the quake-hit people’s private accounts, so that they could directly receive the relief subsidies. The transparency of relief fund’s transfer and usage should be enhanced through the treasury system’s supervision. Meanwhile, cash circulation and supply in the disaster areas should be monitored and analyzed, and cash supply should be ensured by fund allocation management such as transferring funds from the neighboring administrative divisions.
Securities and futures exchanges as well as securities depository and clearing corporations are supported to provide capital and technical services for securities and futures business institutions in the disaster areas to build disaster backup centers and equipment centers and safeguard the systems of trading, settlement and communication. Besides, postal exchange systems in the disaster areas should be timely restored and improved to benefit masses.
Apart from establishing backup systems for important financial infrastructures, such damaged information materials as important documents, data and files should be sorted and put on records to better handle such emergencies.
(3) Charges of the quake-stricken financial institutions should be properly deducted or exempted from.
For the disaster areas, charges of remittance via the payment settlement system should properly be reduced or exempted from. Banking institution supervision fee and business supervision fee should be exempted from for commercial banks, rural credit cooperatives, postal savings institutions (including corporate institutions registered in the disaster areas and branches in such areas) and such non-banking financial institutions as trust companies and enterprise groups’ financial companies in the state- recognized disaster areas. Insurance business supervision fee should be exempted from for insurance companies and insurance intermediaries (including corporate institutions registered in the disaster areas and branches in such areas) in the disaster areas. Also securities market supervision fee should be exempted from for securities, fund and futures companies (including corporate institutions registered in the disaster areas and branches in such areas) that support the disaster areas. Moreover, the following fees should be properly reduced or exempted from for the institutions with heavy damages such as banking association membership fee for banking institutions, investor protection fund, membership fee of securities and futures associations as well as securities and futures exchanges for securities and futures business institutions, and insurance protection fund and insurance association membership fee (excluding provincial and municipal industry associations) for insurance institutions. Provincial rural credit unions are encouraged to reduce or exempt the quake-hit rural credit cooperatives from industry management charges.
Financial institutions in the quake areas are encouraged to reduce or exempt from charges on clients’ account inquiry, report of loss, reapplication and transfer as well as securities holders’ report of loss and reapplication of securities account card, securities inquiry and inheritance.
2. Financial institutions are encouraged to increase credit supply in the disaster areas
(4) Preferential credit policies should be adopted in the disaster areas.
In line with the principles of marketization operation and controllable risks, all financial institutions should timely adjust credit structure and supply according to the needs in the disaster areas to support the reconstruction. National banking institutions should, in the principle of “keeping or dropping projects based on respective merits”, allocate credit resources in favor of the disaster areas by regulating the credit resources within the system and giving priority to the disaster areas in terms of credits review and funds transfer. In addition, such local corporate financial institutions as urban commercial banks in the disaster areas should collect deposits, enhance market financing and increase credit resources. They should also, based on such prudential principles as capital adequacy rate and loan-deposit ratio as well as steady operation, offer more credit support to local disaster-affected enterprises, especially small and medium enterprises, and properly increase the total loan limit. Local rural credit cooperatives should, based on serving “agriculture, countryside and farmers”, offer loans according to farming seasons to support the resumption of local agriculture production. Moreover, in line with the financial discount policy, efforts should be made to offer discount loans for the reconstruction. Also certain preferential policies should be adopted in offering poverty-relief discount loan, small guaranteed loan for laid-off workers and state student loan. Financial institutions are allowed to conduct merger and acquisition loan business, and those institutions without business branches in the disaster areas could conduct cross-regional loan business.
With consideration for the difficulties of disaster-stricken people and enterprises, the repayment of loans granted before the disaster and unable to be repaid on time after the disaster, could be postponed for 6 months. Those people and enterprises won’t be pressed for repayment or imposed on penalty interest. There won’t be bad records, and they could still receive other credit support for the disaster areas.
(5) Credit support should be enhanced in key infrastructure and enterprises, pillar industries, small and medium enterprises and people unemployed due to the disaster.
Financial institutions are encouraged to give due support to loan applications for the major infrastructure projects in the reconstruction, the state-backed key enterprises, the pillar industries and the restoration of such public facilities with income sources as water and electricity supply, roads, communication network, schools and hospitals. More supports should be given to small and medium enterprises with rich employment opportunities, promising products and good credibility by innovative credit products and services. Besides, local governments are encouraged to invest in establishing loan guarantee funds for small and medium enterprises. Emphasis should be laid on giving financial support to promote venture business and employment in the disaster areas. Loans should, according to the policy of little-amount guaranteed loan for laid-off workers, be granted to those who lose jobs due to the quake and start their own business or small labor-intensive enterprises which employ the quake-hit people to a certain extent.
(6) Credit aid to “agriculture, countryside and farmers”
New rural institutions, including village banks, rural mutual cooperatives, loan companies and small loan companies, should be developed for more financial branches and better financial service in the disaster-hit rural areas.
Credit supply of rural credit cooperatives, by various ways including payment with special-purpose treasury instruments (hereinafter referred to as “the instruments”), should be increased for the post-disaster reconstruction. Provided that the instruments held by the disaster-hit rural credit cooperatives meet the payment requirements upon examination, the assessment procedures concerned should be simplified for timely payment. For the rural credit cooperatives failing to meet the payment requirements due to the disaster, we should timely increase their loanable capital by reloaning and guide the investment of public capital in the cooperatives as well.
The scope of mortgage guarantees for rural loans should be widened to encourage forest-right mortgage loan, mining-right mortgage loan, accounts receivable pledge loan and ships manifest pledge loan. Besides, all financial institutions should be encouraged to deliver little-amount credit loans, farmer households’ co-guarantee loans and interest subsidy loans to the disaster-hit farmers, and big breeding families and special breeding industries should be supported by properly increasing loan lines and extending loan terms.
(7) Preferential policies on housing credit
Housing construction in the disaster-hit areas should be actively shored up. Banking financial institutions should give priority to the government-organized reconstruction and restoration of residential quarters and buildings that were damaged in the earthquake disaster. As to projects of common commercial housing and economically affordable housing approved by the government, banking financial institutions are supposed to give more favorable loan terms.
The minimum limit of personal housing lending rate and the down payment proportion concerned in the quake-hit areas should be cut down. The minimum lending rate of the housing purchased by the disaster-stricken residents for their own dwelling is adjusted to 0.6 times the benchmark lending rate from the current level (i.e., 0.85 times the benchmark lending rate for the first house and 1.1 times for the second one) specified by the People’s Bank of China, and commercial banks can independently fix specific lending rates according to clients’ repayment capability. Meanwhile, the minimum down payment proportion is decreased to 10%, and commercial banks can also determine specific down payment proportions based on the loan risk management. All lending rates of personal housing by public accumulation funds are decreased by 1 percentage point. Moreover, banking financial institutions are encouraged to deliver self-building housing loans for rebuilding and restoring the houses destroyed in the quake.
3. More subsidies for the quake-stricken financial institutions
(8) Increasing reloan and rediscount lines
In 2008, a reloan (rediscount) line of RMB20 billion (to be properly increased if necessary) will be granted for the disaster areas based on actual reconstruction needs. Besides, a portion of reloan lines for agriculture, upon more relief by other provinces (also autonomous regions and municipalities), will be distributed to the quake-hit areas every year, with their usage scopes accordingly widened. Since May 1, 2008, the reloan rate has been permitted to reduce by 1 percentage point based on the current loan rate for agriculture, to relieve the burden of the quake-hit financial institutions.
(9) Continuous implementation of preferential reserve policy
During the reconstruction period, corporate financial institutions in the disaster areas will not increase the deposit reserve ratio temporarily, and the policy of difference deposit reserve ratio will not be applied to the corporate financial institutions with low capital adequacy rates.
(10) Permission on advance withdraw of special-purpose deposits for increasing credit capital
As to the financial institutions with special-purpose deposits or insufficient reconstruction capital, advance withdraw of special-purpose deposits in the People’s Bank of China is permitted, with relevant interests paid based on their actual deposit time.
4. Taking advantage of the capital market and the insurance market for reconstruction
(11) Raising the reconstruction fund by the bond market
Eligible corporate financial institutions will be propped up to supplement the capital, increase the reconstruction credit capital and get access to bond financing by issuing hybrid capital bonds and subordinated bonds as well as common financial bonds and asset-backed securities.
Eligible enterprises and those distributing raised funds to the disaster areas should be bolstered to raise funds for rebuilding and resuming production by debt financing instruments, such as including enterprise bonds, corporate bonds and short-term financing bonds.
Financial innovation should be backed up by issuing asset securitization products of infrastructure projects with stable incomes including traffic and water affairs. Besides, direct investment, pooled wealth management and specialized wealth management should be promoted.
(12) Developing enterprises by financing on the stock market and reconstruction of listed companies
We should support enterprises’ financing on the stock market. Under legal conditions, priority should be given to IPO applications of the disaster-stricken enterprises and refinancing of the listed companies there. Especially, priority should go to examinations on financing applications of the companies which intend to use raised funds for rebuilding, resuming production and allocating emergency materials.
We should set up a special examination group for the quake-hit listed companies’ M & A and restructuring, assets injection and overall listing. Furthermore, listed companies in other provinces (cities) should actively participate in the reconstruction and inject assets of emergency materials and equipment to the quake-hit listed companies by “subscribing for shares with assets”.
Moreover, we will properly deduct or exempt from the annual fees that the quake-hit listed companies should pay, and better services will be provided to boost the listing of eligible enterprises.
(13) Guiding insurance institutions to participate in the reconstruction
We should guide insurance institutions to subscribe for the bonds and stocks issued by high-quality enterprises in the disaster areas, and insurance capital should be invested in major infrastructure reconstruction projects, such as traffic, energy resources, environmental protection, water affairs and engineering administration as well.
We should, by making full use of insurance products with more innovation efforts, provide insurance of engineering, property, freightage, agriculture as well as accident & health, and offer preferential insurance rates. For the quake-stricken people, especially the orphans, the disabled and the widowed, special efforts should be made to develop annuity insurance, disability income insurance and endowment insurance.
(14) Guiding all funds and private capital for reconstruction
We should make full use of privately offered fund, venture capital, social donations and international aids by taking favorable measures. A multi-level catastrophe insurance system with multi-participation should be established for the reconstruction and the preparations for secondary disasters.
5. Attaching importance to credit system and protecting legal rights and interests
(15) Protecting clients’ legal rights and interests
The basic information of financial institutions’ clients should be verified and filed as soon as possible. The credit rights whose owners are temporarily missing should be preserved in other special accounts, besides, the victims’ account capital and their ownerships and inheritances of financial assets must be confirmed and protected according to law. Financial institutions should tell the properties of the victims listed by the Ministry of Civil Affairs to their relatives in proper way, and provide thoughtful and convenient financial services of inheritance, property custody and insurance claim. In addition, insurance companies should positively contact their clients in the disaster areas to check their insurance conditions and losses. According related insurance contracts, the claims for earthquake insurance should be accelerated for high efficiency.
(16) Prevention from risks of financial institutions
Financial institutions should better liquidation and management of damaged assets to grasp the loss of their credit assets and fixed assets. Non-performing debts of financial institutions and enterprises, resulting from the earthquake, should be effectively restructured. If the non-performing debts meet current exemption provisions, they should be timely exempted from according to related policies and procedures; for the debts failing to meet the provisions as well as the enterprises and individuals having difficulties in repayments, based on actual losses and repayment capability, financial institutions should better the debt restructuring for timely resumption of production and operation in the principle of “different treatments upon equal negotiation”.
In the principle of marketization, legalization and sustainability, financial support should be provided not only for the reconstruction, but also for preventing financial risks and moral risks.
(17) Safeguarding financial credit rights and establishing a credit system
We should, according to law, regulate and monitor the financial market in the disaster areas to ensure its steady operation. Specifically, measures should be taken to prevent random evasion of bank debts and illegal property occupation by using others’ names or fraudulent certificates. Besides, credit statistics, credit systems and popularization of financial knowledge should be done well for rebuilding and resuming production.
The disaster areas in the Opinions refer to 51 severely and heavily stricken administrative districts recognized by the Ministry of Civil Affairs. Relevant financial supports and services are temporarily provided till June 30, 2011, excluding those with other definite stipulations.
Branches of the People's Bank of China should coordinate with local branches of China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission to better the implementation.
People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission
August 6, 2008 | 
