The self-regulation organizations of the banking industry shall submit their articles of association to the banking regulatory authority under the State Council for filing.

Article 32 The banking regulatory authority under the State Council may engage in the international activities related to banking regulation and supervision.

Chapter IV Supervisory Methods

Article 33 The banking regulatory authority shall, for the purpose of performing its responsibilities, have the authority to require banking institutions to submit, in accordance with applicable regulations, balance sheets, income statements, other financial and statistical reports, information concerning business operations and management, and the audit reports prepared by certified public accountants.

Article 34 The banking regulatory authority may take the following measures to conduct on-site examination for the purpose of exercising prudential supervision:

(1) To enter a banking institution for on-site examination;

(2) To interview the staff of the banking institution and require them to provide explanations on examined matters;

(3) To have full access to and make copies of the banking institution’s documents and materials related to the on-site examination, and to seal up documents and materials that are likely to be removed, concealed or destroyed; and

(4) To examine the banking institution’s information technology infrastructure for business operations and management.

The on-site examination shall be subject to prior approval of the chief responsible person of the banking regulatory authority. The on-site examination team shall comprise no less than two examiners, who shall produce their legal certificates and the examination notice upon examination. If the on-site examination team comprises less than two examiners, or the examiners fail to produce their legal certificates or the examination notice upon examination, the banking institutions shall have the right to refuse the examination.

Article 35 The banking regulatory authority may, for the purpose of performing its responsibilities, hold supervisory consultations with the directors and senior managers of a banking institution to inquire about the major activities concerning its business operations and risk management.

Article 36 The banking regulatory authority shall require banking institutions to disclose, in accordance with applicable regulations, to the public reliable information, including, among others, financial reports and statements, risk management situations, changes in the directors and senior managers and information on other significant matters.

Article 37 When a banking institution fails to meet prudential rules and regulations, the banking regulatory authority under the State Council or its provincial offices shall require it to take remedial measures within a prescribed period of time. If the banking institution fails to correct the deficiencies within the prescribed period of time, or the safety and soundness of the banking institution are likely to be severely threatened and the interests of its depositors and other customers are likely to be jeopardized, the banking regulatory authority under the State Council or its provincial offices may, subject to the approval of their chief responsible officers, take the following measures depending on the severity of the circumstances:

(1) To suspend part of the businesses of the banking institution and/or withhold approval of new products or services;

(2) To restrict dividend or other payments to shareholders;

(3) To restrict asset transfers;

(4) To order the controlling shareholders to transfer shares or restrict the powers of relevant shareholders;

(5) To order the banking institution to replace the directors and/or senior managers or restrict their powers; and

(6) To withhold approval of establishing new branches.

The banking institution shall report to the banking regulatory authority under the State Council or its provincial offices once it is restored to meet the prudential rules and regulations after taking corrective measures. The banking regulatory authority under the State Council or its provincial offices shall terminate the measures prescribed in the preceding paragraph within three days after the verification of compliance.

Article 38 When a banking institution is experiencing or likely to experience a credit crisis, thereby seriously jeopardizing the interests of depositors and other customers, the banking regulatory authority under the State Council may take over the banking institution or facilitate a restructuring. The take-over or restructuring shall be carried out in accordance with applicable laws and administrative regulations.

Article 39 When a banking institution has been found serious violation of laws and regulations, or significant unsafe or unsound practices, thereby seriously threatening financial order and public interests unless it is closed, the banking regulatory authority under the State Council shall have the authority to close the institution in accordance with applicable laws and regulations.

Article 40 In the case of the take-over, restructuring, or closure of a banking institution, the banking regulatory authority under the State Council shall have the authority to require the directors, senior managers and other staff of the banking institution to perform their duties according to the requirements of the banking regulatory authority under the State Council.

In the course of the take-over, restructuring or liquidation after the closure of a banking institution, the banking regulatory authority under the State Council shall have the authority, subject to the approval of its chief responsible person, to take the following measures against the directors and senior managers directly in charge and other staff directly held responsible:

(1) When the departure from the People’s Republic of China of the directors and senior managers directly in charge and other staff directly held responsible is likely to jeopardize the national interests, the banking regulatory authority under the State Council may request the border control authority to prevent them from leaving the People’s Republic of China; and

(2) To request the judicial authority to prohibit the directors and senior managers directly in charge and other staff directly held responsible from moving or transferring their properties, or establishing other rights on their properties.

Article 41 The banking regulatory authority or its provincial offices shall have the authority, subject to the approval of their chief responsible persons, to inspect the bank accounts of the banking institution suspected in violation of laws and regulations, and the bank accounts of its staff and connected parties, and may, subject to the approval of their chief responsible persons, request the judicial authority to freeze the illegally obtained funds that are suspected to be transferred or concealed.