On June 29 2001, the People's Bank of China (PBOC) promulgated China's first set of electronic banking regulations, entitled "Tentative measures governing electronic banking business".
The new regulations require all Chinese banking corporations intending to provide e-banking services to seek approval from the PBOC for such services. Overseas banking corporations (including those incorporated in Hong Kong and Taiwan) are also required to seek approval from the PBOC if they intend to offer e-banking services in China.
Criteria for offering e-banking services include the following:
- bank applicants should have extensive experience in dealing with risk management;
- technology and infrastructure used for e-banking should be sound;
- the financial position of applicants must be sound; and
- bank executives should have sound knowledge of e-banking operation – the management should be able to manage and control risks associated with e-banking.
Supporting documents for applications include:
- a feasibility report addressing, among other things:
- the kind of e-banking services proposed to be offered,
- technical support and specifications including contingency support,
- details of technical support staff and management,
- risk management for e-banking operations,
- profit and loss forecasts;
- an assessment of the applicant's e-banking operations and its security provided by a qualified person recognized by the PBOC;
- a long term business plan;
- emergency and contingency measures; and
- other information the PBOC may specifically require.
The regulations form an initial but significant step in future regulatory compliance surrounding e-banking and touch on consumer protection and security measures, two important considerations associated with e-banking transactions and the role of the regulator.