Law on the People's Bank of China (2003)

Publication Date: 2003
Published by: Government of the People's Republic of China
Document Type: PDF

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A look at the responsibilities of the People’s Bank of China

This law governs the activities of the People’s Bank of China (the Bank). It is divided into the following eight chapters:

Chapter I explains the general provisions of the law, including:

• Its purpose, which is to:
  • Ensure the correct formulation and implementation of monetary policy;
  • Maintain financial stability;
  • Prevent and mitigate financial risks.
• Its functions.
• Its reporting authority.
• Its role in financial supervision and regulation.

Chapter II discuses the organizational structure of the Bank, and outlines the roles of the Governor, deputy governors, the Monetary Policy Committee, etc.

Chapter III highlights the legal tender of the Bank – the Reminbi - discussing its units, use, printing and issuance, as well as prohibitions about counterfeiting, damaging and destroying.

Chapter IV details the business operations of the bank, including:

• The implementation of monetary policy;
• Management of the State Treasury;
• Issue of treasury bonds and other government securities;
• The organization of a clearing system for banking financial institutions.

Chapter V describes the Bank’s role in financial regulation and supervision.

Chapter VI details the financial and accounting processes of the Bank, including its:

• Independent budget arrangement;
• Surrender of profit to the central budget;
• Compliance with laws;
• Compilation of balance sheet, etc.

Chapter VII discuses legal liabilities of the bank, and describes penalties for counterfeiting the Reminbi and for non-compliance.

Chapter VIII contains supplementary provisions that take into account the various financial institutions that are governed by this law.