The bank insurance board, the ministry of industry and information technology, the development reform commission
Ministry of finance people's bank
Notices that credit financing charges reduce the combined cost of business finance
Silver insurance. Number 18
The bank of china, the shanghai headquarters of the people's bank, branches of the business management department, the municipal branches of the provincial councils, the provincial departments (autonomous regions, municipalities directly under the central government and municipalities with separate plans), the industrial and informational authorities of the xinjiang production construction corps, the development and reform commission of the xinjiang production construction corps, the provincial departments (autonomous regions, municipalities directly under the central government and municipalities with separate plans), the finance department of the xinjiang production construction corps, the finance department of the xinjiang production construction corps, the finance department of the xinjiang production construction corps, the shanghai headquarters of the people's bank, branches of the central bank of china, the ministry of business administration, the municipal central offices of the provinces (autonomous regions, municipalities directly under the central government and municipalities with separate plans), the market monitoring board of the xinjiang production construction corps (offices, commissions), the policy banks, large banks, joint-stock banks, foreign banks, financial asset management companies, insurance companies, asset management companies, and management units:
In recent years, the banking insurance industry has carefully followed up on the deployment of party central and state council decisions and has continued to increase its fee reduction efforts. It has played a positive role in alleviating the difficulty of financing enterprises, but problems such as unreasonable charges, loan linkages and forced tied-up sales remain. With a view to further regulating the collection and management of credit financing links, safeguarding the right of enterprises to know, to choose and to fair transactions, reducing the combined costs of enterprise finance and better serving the quality of the real economy, the following information is provided on the matter:
I. Part-fee cancellation and unreasonable conditions in the credit chain
(i) elimination of costs such as management of credit funds. Banks may not collect credit funds that are entrusted to pay transfer fees. Funds transferred but not used by the enterprise may not be charged a fee for managing the funds. In the case of micro-enterprise credit financing, no advance repayment or deferred default may be provided for in the loan contract, and overdraft commitments and credit certificate fees may be cancelled。
(ii) strict enforcement of prohibitions such as bonding and compulsory tied-up lending. Except in the case of a single-collateral loan or bond business, a certain amount or percentage of the enterprise's deposit may not be made a precondition for the approval of a credit application. An enterprise may not be required to convert a certain amount or proportion of its credit funds into deposits. It is important not to lose sight of the actual needs of the enterprise to classify part of the amount of credit awarded as a bank note of exchange or to impose non-cash alternatives to credit funds, such as bank notes of exchange. An enterprise may not, at the time of approval of credit, be obliged to purchase insurance, finance, funds or other asset management products。
(iii) advance credit clearance. Banks should, on the basis of an enterprise's application, conduct credit evaluations and audits ahead of the maturity of the stock loan, increase the speed of response and time limits for approval. In the absence of a significant deterioration in the enterprise's production operations, financial position and external environment, new credit requirements leading to a significant increase in the combined cost of financing must not be introduced without justification; loan interest rates may not be increased on the grounds of interruptions to ensure that enterprises in need of finance receive loans at reasonable cost; credit support for “scrambling enterprises” must not be continued, bankable funds should be squeezed and other corporate financing costs pushed higher。
Ii. Rational control of the combined costs of financing the loan chain
(iv) identifying bank charges. Bank interest and fees should be specified in the enterprise's loan contract or service agreement and not charged outside the contract. In the case of customers recommended by a third party institution, the bank shall inform the bank of the procedure for submitting a credit application directly to the bank and the level of interest。
(v) strengthening management of third-party institutions. Banks should implement a list-based management of cooperating third-party institutions, review the qualifications of third-party institutions at the level of first-tier branches and above, and expressly prohibit third-party institutions from charging companies on behalf of banks in contracts. Banks should be aware of the rates charged to enterprises by cooperating third-party agencies, assess the combined costs of corporate finance and not cooperate with third-party agencies that charge excessive fees。
(vi) the imposition of “two prohibitions”. Banks should have customer information to support credit decision-making, prohibiting the transfer of substantive responsibility for pre-credit investigations and post-credit management to third-party institutions, and prevent the resulting indirect escalation of financing costs. Banks are prohibited from allocating credit funds to cooperating third-party institutions, preventing the retention or diversion of credit funds and reducing the amount actually available to enterprises。
Iii. Leveraging the credit chain for enterprises
(vii) the reasonable introduction of letters of credit arrangements. Banks should fully exploit the integration of business credit information and support the provision of easy and fast services to enterprises upstream and downstream of the supply chain by linking them to the relevant management and information systems of core enterprises and government departments, using financial science and technology tools to accurately project customer credit. Depending on the creditworthiness and risk profile of the enterprise, the bank shall establish credit-related credit and professional service arrangements and may not appoint credit and professional services for the enterprise except for specific standardized products. Where existing measures can effectively cover risks, banks should not require enterprises to increase the combined cost of financing by adding additional credit instruments. Banks may not charge co-operation fees to cooperating institutions in the name of recommending clients to professional service institutions, resulting in higher costs for enterprise financing。
(viii) costs borne independently by the bank and in full by the bank. If the bank has a reimbursement system for the costs of registering the mortgages advanced by the enterprise, it shall set up a fee register to be followed up by a dedicated person. A bank that introduces external data, information or ratings for the purpose of credit evaluation may not require the enterprise to pay the costs involved. In the case of micro-enterprise finance, where the bank is the first beneficiary of the borrower's contingency insurance, the insurance costs are borne by the bank。
(ix) costs borne jointly by the enterprise and the bank, which may not transfer to the enterprise by force or contract. Banks should introduce differentiated enforcement notary arrangements based on the risk profile of the enterprise, and should agree with the borrower, on the basis of mutual consent, on the modalities for enforcing notary fees, without imposing transfer costs. In the case of credit financing for micro-enterprises, banks are encouraged to assume notary fees on their own initiative; banks, as claimants in mortgage property insurance, are jointly financed by banks and enterprises in a reasonable proportion。
(x) costs borne independently by the enterprise, and banks, insurance companies and financing guarantee companies, among others, should take measures to minimize the expenses of the enterprise. Banks may not compel enterprises to purchase guaranteed insurance and may not exempt them from their risk management responsibilities as a result of such insurance. Insurance companies may not provide financing enhancement products that are significantly higher than their own rates for similar or market-like products, thereby increasing the burden of corporate financing. The financing guarantee company should gradually reduce the counter-guarantee requirement and, if it is necessary to introduce counter-guarantee measures, should assess the actual security costs of the enterprise in a comprehensive manner。
Iv. Consideration of enterprise financing costs in the examination chain
(xi) strengthen the fine-tuning of funds transfer pricing. Banks are encouraged to embed the lpr interest rate on loans into their internal pricing chain. In determining the price of internal transfers, banks should adjust dynamically on the basis of accurate accounting. For micro-enterprise credit financing, banks are encouraged to increase their domestic transfer pricing preferences and to further reduce financing costs。
(xii) scientific development of internal credit ratings and provision for crediting. The internal credit rating of the bank is balanced against that of the borrower and the debt rating, with reference to external ratings. For credit projects where the main borrower is under-rated but has high debt ratings, banks can manage risks through fiduciary payments, closed management, and lower the cost of enterprise financing through differential pricing. Banks are required to comply with accounting and regulatory requirements in calculating the provision, taking into account credit default rates and default loss rates in a comprehensive manner, assessing them in the context of macroeconomic circumstances and business prospects, and avoiding the unscientific use of the provision leading to higher financial costs for the enterprise。
(xiii) internal appraisals should be appropriate and detailed. Banks should improve the integrated business performance appraisal to avoid increasing the cost of enterprise financing through lending linkages, mandatory tied-up sales and unreasonable credit conditions by line lines and branches to achieve inappropriate performance appraisal objectives. Banks should set different targets for credit financing across different regions and types of enterprises, so as to prevent too many participants, too long financing chains and indirectly higher financing costs as a result of excessive low-risk pursuit。
V. Improved management of financing fees and enhanced internal controls and audit oversight
(xiv) effective functioning of corporate governance mechanisms. Banking insurance institutions should comply with the requirements of the state's policies, such as the reduction of fees and the reduction of the burden on businesses, and establish reasonable annual operating goals and operational targets, improve management efficiency, increase savings and safeguard the legitimate interests of shareholders。
(xv) improving the system for the management of financing fees. Banks should set and adjust the prices of services in a manner consistent with the principles of openness, fairness, honesty and credit, reasonable measurement of expenditures on services, taking fully into account market factors for integrated decision-making, and should not use agreed pricing to charge costs above reasonable levels. The fine-tuning of the implementation requirements of the fee system, with differential treatment for different applications, avoids “one size fits all” in the implementation of branches. An additional fee may not be charged beyond what is agreed in the contract for the service, the price and the fee, etc.; in the case of a fee-for-service that has been charged but the operation has been terminated earlier, the fee shall be ensured to match the service. • encourage differential pricing strategies for msmes to determine the rates for msme services in accordance with the policy of guaranteed molybdenum。
(xvi) sound internal control and oversight. Banks should implement a fee management classification authorization mechanism to strengthen the control of branches; in cases where there is a need for differentiated service prices due to regional differences, fees should be established by the head office. Improve the information system, increase the automated processing capacity for fee accounting, increase the reconciliation function for miscalculation of charges, update system settings in a timely manner, and avoid over-receiving and misreceiving as a result of system deficiencies or random operations. The internal audit should cover the fee management system and performance, and audit coverage should not be less frequent than for general items. (c) strengthen controls over branches and employees to prevent forced tied-ups, the transmission of benefits and the collection of kickbacks。
(xvii) full disclosure of service price information. The right of enterprises to know and to make their own choices is guaranteed by making price information and preferential policies known in a clear and visible manner through such channels as business premises, official websites and mobile phones. Information published is regularly assessed and service charges and price criteria are updated in a timely manner。
Development of cross-sectoral oversight synergies and positive incentives
(xviii) developing oversight synergies. Industry and information authorities at all levels have taken the lead in improving the reporting and inspection mechanism for non-compliance charges, identifying work systems such as information-sharing across sectors and legal sanctions, and reducing the cost of safeguarding the rights of enterprises. Industry authorities have integrated efforts to regularize fees for services by market intermediaries. For enterprises with low-cost integration and arbitrage, the people's bank is reported to have been incorporated into the system。
(xix) create positive incentives. Industry and information authorities at all levels are promoting deeper integration cooperation, building and promoting national convergence platforms, strengthening business and project white list management and providing information support for enterprise credit financing. The financial authorities at all levels should give a reasonable assessment of the performance of the state-owned holding bank insurance institutions, reflecting compliance with the state's requirements to reduce the cost of financing enterprises. The people's bank should support banks that strictly implement the policy requirements in terms of liquidity, asset securitization and special financial debt for micro-enterprises; the bank's superintendency should give priority to the corresponding business qualification。
(xx) strengthening industry self-regulation. Banking, insurance and finance guarantee associations should promote a mutually beneficial and win-win industry culture, implement policies for credit financing fees and effectively reduce business costs. In the case of arbitrage of credit funds or the purchase of other financial products, the bank shall specify in the contract the borrower's responsibilities and corresponding measures。
This notification is effective 1 june 2020. Trust companies, financial asset management companies and car finance companies。
Bank insurance board, ministry of industry and information technology
Ministry of finance
General directorate of market supervision
18 may 2020
