The revised draft of the Banking Supervision and Administration Law was submitted to the Standing Committee of the National People's Congress for second review on August 25th. The second review of the draft further consolidates the responsibility of banking regulatory authorities to protect banking consumers, improves relevant systems, and specifically regulates illegal behaviors such as embezzlement of customer funds by banking and financial institution employees in practice.
Specifically, the second review of the draft adds provisions that the banking regulatory authority under the State Council is responsible for coordinating the protection of consumer rights and interests in the banking industry, establishing and improving the system for protecting consumer rights and interests in the banking industry, and establishing and improving the mechanism for handling consumer complaints and diversified resolution of consumer disputes in the banking industry.
At the same time, the second review of the draft adds a list of banking and financial institutions and their employees who shall not engage in behaviors that infringe upon the legitimate rights and interests of consumers, including not infringing upon the legitimate rights and interests of depositors and other customers through misappropriation of funds, not forcibly bundling or selling products or services, not providing depositors and other customers with products that do not meet their risk tolerance in violation of suitability management regulations, and not using improper means to collect payments.
Regarding the legislative purpose, the second review of the draft adds a provision in Article 1 to "improve the quality and efficiency of financial services for the real economy". At the same time, due to the different types of financial institutions in the banking industry, there are significant differences in asset liability scale among institutions. The second review of the draft stipulates that the banking regulatory authority shall implement classified and graded supervision and management of banking financial institutions based on factors such as institution type, asset liability scale, risk level, and systemic importance.
In order to provide stronger legal and institutional support for preventing and resolving financial risks in the banking industry, the second review of the draft will split Chapter 4 "Supervision and Management Measures" into two chapters: "Supervision and Management Measures" and "Risk Disposal", clarify the central and local division of labor for risk disposal of banking and financial institutions, strengthen risk disposal measures, and clarify the ways in which deposit insurance fund management institutions participate in risk disposal. (Outlook New Era)