Economy

China to apply stricter banking rules next year

(Xinhua)
Updated: 2011-05-04 06:51

BEIJING - China's banking regulator announced stricter regulation rules for commercial banks Tuesday to help improve capabilities of the country's banking and financial institutions in combating risks.

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The China Banking Regulatory Commission (CBRC) said it would set the minimum capital adequacy ratio for banks of systematic significance at 11.5 percent, while that for banks with non-systematic significance at 10.5 percent.

The banks  will have to meet the new standards by the end of 2013 and the end of 2016, respectively.

The criterion of a bank's significance will be determined within this year, CBRC said on its website.

Banks will be restricted in engaging in structurally complicated and highly-leveraged transactions to prevent excessive risk taking.

The systematically important banks are also being told to reduce their share of loans to a single debtor or group customer among their total capital assets.

The new regulation standards will be implemented starting January 1, 2012.