When a borrower fails to repay a secured loan， the commercial bank has the right to be repaid the principal and interest of the loan or the priority of getting paid with the collateral2 thereof. A commercial bank shall dispose of the real estate or stocks on mortgage or pledge within a year from the date of obtaining.
A borrower shall assume the responsibility for failure to repay the unsecured loan falling due in accordance with the contract thereof.
Article 43 A commercial bank shall not engage in trust investment or stock business， or invest in real estate not for its own use within the People s Republic of China.
A commercial bank shall not invest in non-bank financial institutions or enterprises within the People s Republic of China. A commercial bank which has made investment in non-bank financial institutions or enterprises prior to the promulgation3 of this Law shall be subject to other provisions stipulated4 by the State Council.
Article 44 A commercial bank in handling settlements such as acceptance， remittance5 and collection shall make timely cashing and entries pursuant to relevant provisions without detaining bills or instruments or dishonoring them in violation6 of regulations. The relevant provisions for the time limit for bill acceptance and entries in accounting7 books should be made public.
Article 45 A commercial bank shall apply for approval for issuing financial bonds or seeking loans outside China in accordance with the law and administrative8 decrees.
Article 46 Inter1-bank loan shall be subject to the time limit defined by the People s Bank of China and the maximum time for such financing shall not exceed four months. It is prohibited to use call money to extend loans on fixed9 assets or to make investment.
The call money for lending shall be only the idle fund after depositing required reserve， leaving adequate stand by reserve and repayment10 of loans falling due to the People s Bank of China. The call money for borrowing shall be used to meet the position shortage in inter branch settlement and inter branch remittance and temporary needs for turnover11 of funds.
Article 47 A commercial bank shall not receive money deposits or extend loans by raising or lowering interest rates or by other unjustifiable means in violation of regulations.
Article 48 An enterprise or undertaking12 may open a principal account with a commercial bank of its own choice for day to day transfer and settlement of accounts and cash receipt and payment， but it shall not open two or more principal accounts.
No organization or individual shall deposit the fund of an organization in an account opened in the name of an individual.
Article 49 A commercial bank shall fix its business hours to the convenience of its clients and make public announcement thereof. A commercial bank shall conduct its business during its announced business hours and shall not suspend business or shorten its business hours at will.
Article 50 A commercial bank shall collect commission fees on handling business and providing services in accordance with the stipulations of the People s Bank of China.
Article 51 A commercial bank shall preserve all the financial statements， business contracts and other information for a specified13 period in accordance with relevant state regulations.
Article 52 The staff of a commercial bank shall abide14 by the law， administrative decrees and regulations and other rules for the administration of various businesses and shall not have wrong conducts listed below：
taking advantage of their positions to demand or accept bribes15， or violating relevant state regulations to accept commissions or service fees under any pretext16；
taking advantage of their positions to commit embezzlement17， misappropriation or unlawful possession of the funds of the bank or of clients；
providing loans or guarantee to relatives or friends in violation of regulations；
holding positions concurrently18 at other economic institution；
other acts in violation of the law， administrative decrees and regulations and rules in business management.
Article 53 The staff of a commercial bank shall not disclose state secrets or commercial secrets which they come into possession during their service in the bank.
Chapter V Financial Accounting
Article 54 A commercial bank shall establish and improve its financial accounting system in accordance with the law and the state unified19 accounting standards as well as the relevant stipulations of the People s Bank of China.
Article 55 A commercial bank shall， in accordance with relevant state regulations， truthfully and in an all-round way record and reflect its business activities and financial position， produce its annual financial accounting report and timely submit its financial statements to the People s Bank of China and the treasury20 department. A commercial bank shall not establish accounting books other than those legally specified.
Article 56 A commercial bank shall announce its business performance and audited22 statement of the previous fiscal23 year within three months after the end of every fiscal year in accordance with the stipulations of the People s Bank of China.
Article 57 A commercial bank shall retain a reserve against bad and doubtful accounts and write off bad debts in pursuance of relevant state regulations.
Article 58 The fiscal year of a commercial bank begins on the first of January and ends on the thirty-first of December of the Gregorian calendar.
Chapter VI Supervision24 and Administration
Article 59 A commercial bank shall formulate25 its business rules， establish and improve its business management， the system of cash control and its security system in accordance with the stipulations of the People s Bank of China.
Article 60 A commercial bank shall establish and improve its systems of examining and checking deposits， loans and settlement， bad and doubtful accounts and other business activities.
A commercial bank shall conduct regular examination and checks on its branches.
Article 61 A commercial bank shall periodically submit to the People s Bank of China balance sheets， profit and loss statements and other financial statements and information.
Article 62 The People s Bank of China is authorized26 to exercise examination of and supervision over the deposits， loans， settlements and bad and doubtful accounts of a commercial bank at any time in accordance with the provisions of Chapter III， Chapter IV and Chapter V of this Law. The personnel in charge of the examination and supervision should produce legitimate27 certificates at the time of conducting examination and supervision. A commercial bank shall provide financial accounting information， business contracts and other information about its business and management at the request of the People s Bank of China.
Article 63 A commercial bank is subject to the audit21 control by the auditing28 authorities in accordance with the audit law and regulations.
Chapter VII Takeover and Termination
Article 64 When a commercial bank is in or is liable to be in a credit crisis thus seriously threatening the interests of the depositors， the People s Bank of China may take over the said bank.
The purpose of the takeover is to take necessary measures with regard to the commercial bank taken over in order to protect the interests of the depositors and help the commercial bank resume its normal operation. The debtor-creditor relationship of the commercial bank existing before the takeover remains29 unchanged.
Article 65 The People s Bank of China shall determine a takeover and organize its implementation30. The People s Bank of China shall specify31 the following contents in its takeover decision：
the name of the commercial bank to be taken over；
the reason for the takeover；
the organization of the takeover；
the time limit of the takeover.
The decision for the takeover shall be made public by the People s Bank of China.
Article 66 A takeover begins on the day of implementation of the takeover decision.
The organization in charge of the takeover shall begin exercising the power over the management of the commercial bank from the day of implementing32 the takeover decision.
Article 67 On expiration33 of the term of the takeover， the People s Bank of China may determine to prolong the takeover， but the term shall not exceed two years to the maximum.
Article 68 Takeover shall be terminated in any of the following cases：
that the term of the takeover expires or the prolonged term of takeover determined34 by the People s Bank of China expires；
that prior to the expiration of the term of takeover， the commercial bank has recovered its capacity of normal operation； or
that prior to the expiration of the term of takeover， the commercial bank has been merged35 or declared bankrupt in accordance with the law.
Article 69 When a commercial bank splits， or merges36 with another one， or dissolves on reasons for dissolution pursuant to the statute37 of the bank， it shall submit an application to the People s Bank of China with reasons for the dissolution and a plan for liquidation38， including repaying the principals and interests of deposits. It shall be dissolved with the approval from the People s Bank of China.
A liquidation group shall be formed to conduct liquidation and repayment of the principals and interests of deposits shall be made in time according to the plan for liquidation when a commercial bank is to be dissolved. The People s Bank of China shall oversee39 the liquidation through.
Article 70 When a commercial bank is closed down by order on account of its banking40 permit having been revoked42， the People s Bank of China shall lose no time to form a liquidation group to conduct liquidation and repay the principal sand interests of deposits in time according to the plan for liquidation in accordance with the law.
Article 71 When a commercial bank is incapable43 of repaying its mature debts， may， with the consent of the People s Bank of China， be declared bankrupt by the People s Court. When a commercial bank is declared bankrupt in accordance with the law， the People s Court may organize the People s Bank of China and other relevant departments and personnel to form a liquidation group to conduct liquidation.
At the time of bankruptcy44 liquidation， a commercial bank shall give priority to paying the principal and interests of savings45 deposits after paying the liquidation fees and its staff wages and labor46 insurance fees in arrears47.
Article 72 A commercial bank shall be terminated on account of dissolution， being closed down by order or declared bankrupt.
Chapter VIII Legal Liabilities
Article 73 A commercial bank shall assume the responsibility of paying interest accrued48 and other civil responsibilities of compensation for damages to the property of depositors or other clients under one of the situations listed below：
delaying or refusing repayment of the principal and interests of a deposit with no proper reason；
refusing to cash checks and to debit49 or credit accounts in violation of regulations regarding bill acceptance and other settlements or intentionally50 delaying to accept bills or instruments or dishonoring a bill in violation of the regulations；
illegally investigating， freezing or withholding51 and transferring the savings deposit of an individual depositor or the deposite of an institutional depositor； and
other actions inflicting52 damages to depositors or other clients in violation of the provisions of this Law.
Article 74 Where one of the situations listed below occurs， the people s Bank of China may order the commercial bank to make corrections， confiscate53 the illegitimate gains if there is any， and mete54 out a fine ranging from one to five times the amount of the illegitimate gain； or， if there is no illegitimate gains， mete out a fine ranging from l00，000 yuan to 500，000 yuan； if the case is particularly serious or the offender55 fails to make correction within the specified time， the People s Bank of China may order it to suspend business and make rectification56 and consolidation57， or revoke41 its banking permit； and if the case constitutes a crime， the commercial bank shall be investigated for criminal responsibilities：
issuing financial bonds or borrowing funds from outside China without official approval；
dealing58 in government bonds， or dealing in or acting59 as agent in dealing in foreign exchanges without official approval；
engaging in trust investment and stock business in the country， or making investment in real estate not for its own use；
making investment in non-bank financial institutions or enterprises in the country；
extending unsecuried loans to related persons or extending loans against a collateral on more favorable conditions than to other borrowers of similar loans；
submitting false financial statements or financial statements which conceal60 important facts；
refusing to accept the supervision and examination by the People s Bank of China；
leasing or lending banking permit.
Article 75 When one of the situations cited in Article 73 of this Law or one of the situations listed below occurs， the People s Bank of China may order the commercial bank to make corrections， confiscate the illegitimate gains if there is any， and mete out a fine ranging from one to three times the amount of the illegitimate gain； or， if there is no illegitimate gains， mete out a fine ranging from 50，000 yuan to 300，000 yuan：
having failed to place required reserve for deposits in pursuance of the stipulations of the People s Bank of China；
having failed to abide by the stipulations on capital adequacy， the ratio between deposit and credit， the liquidity61 ratio， the credit ratio of a single borrower， and other rules regarding asset and liability ratio mange ment stipulated by the People s Bank of China；
setting up a branch without official approval；
making splits or merges without official approval；
using call money longer than the designated time or using call money to extend loans on fixed assets；
receiving money deposits or extending loans by raising or lowering interest rates or by other improper62 means in violation of regulations.
Article 76 When a commercial bank has behavior referred to in Articles 73， 74 and 75 of this Law， the person in charge with direct responsibility and other personnel with direct responsibility shall be given disciplinary punishment； and if the case constitutes a crime， the offender shall be investigated for criminal responsibilities.
Article 77 When one of the situations listed below occurs， the People s Bank of China may order the commercial bank to make corrections， confiscate the illegitimate gains if there is any， and mete out a fine ranging from one to three times the amount of the illegitimate gain； or， if there is no illegitimate gains， mete out a fine ranging from 50，000 yuan to 300，000 yuan：
using the word “bank” without official approval；
buying more than ten percent of the total shares of a commercial bank without official approval；
opening a bank account in the name of an individual with the fund of an organization.
Article 78 When a commercial bank fails to submit the relevant information to the People s Bank of China according to the relevant stipulations， or fails to report changes for approval in violation of Article 24 of this Law， the People s Bank of China shall order it to make corrections， and， if it fails to make corrections in time， mete out a fine ranging from 10，000 yuan to 100，000 yuan.
Article 79 Anyone who sets up a commercial bank without official approval or illegally receives money deposit from the public or receives money deposit from the public in disguised form shall be investigated for criminal responsibilities in accordance with the law and the said bank shall be banned by the People s Bank of China.
Anyone who counterfeits64， alters or transfers the banking permit of a commercial bank shall be investigated for criminal responsibilities in accordance with the law.
Article 80 A borrower who obtains a loan by fraud thus constituting a crime shall be investigated for criminal responsibilities in accordance with the law.
Article 81 Any of the staff of a commercial bank who， by taking advantage of the convenience provided by his position in the bank， extorts65 or accepts bribes， or accepts commissions or other fees under any pretext in violation of state regulations shall be investigated for criminal responsibilities in accordance with the law.
If a loan extended or guarantee provided in connection with a behavior cited in the previous paragraph causes a loss， the offender shall assume all or part of the responsibility for compensation.
Article 82 Any of the staff of a commercial bank who taking advantage of the convenience of the position in the bank commits embezzlement， or misappropriation or unlawfully possesses the fund of the bank or a client shall be investigated for criminal responsibilities in accordance with the law if the case constitutes a crime， or be given disciplinary punishment if it does not constitute a crime.
Article 83 Any of the staff of a commercial bank who causes a loss to the bank on accurate of his dereliction of duty shall be given disciplinary punishment； and if the case constitutes a crime， shall be investigated for criminal responsibilities in accordance with the law.
Any of the staff of a commercial bank who causes a loss by extending a loan to or providing a guarantee to a relative or friend in violation of regulations shall assume all or part of the responsibility for compensation.
Article 84 Any of the staff of a commercial bank who discloses state or commercial secrets which come into his or her possession during his or her service in the bank shall be given disciplinary punishment and， if the case constitutes a crime， shall be investigated for criminal responsibilities in accordance with the law.
Article 85 When an organization or individual forces a commercial bank to extend a loan or provide guarantee on a loan， the person in charge directly responsible and other personnel directly responsible for the incident shall be given disciplinary punishment， and， if a loss is incurred66， shall be held responsible for compensation for all or part of the loss.
Any of the staff of a commercial bank failing to reject forceful demands of any organization or individual for a loan or guarantee shall be given disciplinary punishment and， if a loss is incurred， shall be held responsible for appropriate compensation.
Article 86 If a commercial bank and its staff are not reconciled to the penalty meted67 out by the People s Bank of China， they may bring a suit to the People s Court in accordance with the Administrative Procedure Law of the People s Republic of China.
Chapter IX Supplementary68 Provisions
Article 87 Commercial banks which have been established with official approval in pursuance of the stipulations by the State Council prior to the promulgation of this Law may not undergo formalities for examination and approval again.
Article 88 If laws and administrative decrees have special stipulations regarding banks of foreign capital， Chinese-foreign joint69 banks and branches of banks of foreign countries under jurisdiction70 of the provisions of this Law， those special stipulations shall apply.
Article 89 The relevant provisions of this Law are applicable to urban and rural credit cooperatives in their deposit， loan and settlement businesses.
Article 90 The relevant provisions of this Law are applicable to the postal71 deposit and remittance business of postal enterprises.
Article 91 This Law shall come into effect on July 1， l995.
