Article 17 A consumer finance company shall provide loans for general purpose personal consumption to borrowers who have applied for loan for consumer durables with the company and have good payment records.

Article 18 The balance of the consumption loan of a consumer finance company to any individual shall not exceed five times the monthly income of the borrower.

Chapter IV Administration and Supervision

Article 19 A consumer finance company shall establish a sound corporate governance structure and internal control system, formulate business operation rules and set up a comprehensive and effective risk management system according to relevant provisions of the CBRC.

Article 20 A consumer finance company shall observe the following requirements regarding administration and supervision:

(1) The rate of capital sufficiency shall be no less than 10 percent;

(2) The percentage of inter-bank lending shall be no higher than 100 percent of the total assets;

(3) The rate of sufficiency of reserves for loss on assets shall be no less than 100 percent; and

(4) The balance of investment shall be no higher than 20 percent of the total assets.

The measures for calculating the index above shall accord with relevant provisions of the CBRC on statement index system for non-onsite monitoring system.

Article 21 A consumer finance company shall establish a prudent reserve system for asset depreciation according to relevant provisions and withdraw the said reserves on full amount in a timely manner.

Article 22 A consumer finance company shall establish a risk pricing mechanism for the interest rate of consumption loans and set the interest rate level for consumption loans within the scope permitted by laws and regulations according to such factors as capital cost, risk cost, required return on capital and market price, so as to ensure the price can cover risks.

Article 23 A consumer finance company shall establish an effective risk management system and reliable business operation procedures to identify false application information and avoid fraud.

Article 24 If there is a need for business outsourcing, a consumer finance company shall establish policies and management systems regarding business outsourcing, including the decision procedures for business outsourcing, appraisal and management of those providing outsourcing services, measures for keeping business information confidential and safe and emergency plans.

A consumer finance company shall report to the CBRC about the main risks and corresponding risk prevention measures concerning the business outsourcing agreements before the conclusion of the said agreements.

A consumer finance company shall not outsource businesses closely related to loan decision-making and core technologies for risk control.

Article 25 A consumer finance company shall refer to relevant provisions of the Measures for Disclosure of Information by Commercial Banks to establish an information disclosure system to disclose information such as accounting statements, risk management situation, corporate governance and annual highlights etc. in a timely manner.

Article 26 A consumer finance company shall prepare and submit accounting statements and other statements required by the CBRC to the CBRC.

Article 27 A consumer finance company shall establish a regular external auditing system and submit the annual auditing report with the signature of its legal representative to the CBRC within four months since the end of every fiscal year.

Article 28 A consumer finance company shall accept the examination of the CBRC according to law and shall not refuse or block such examination.

The CBRC may designate an accounting firm, if necessary, to audit the consumer finance company on its business, finance, risk, internal control system and implementation.

Article 29 A consumer finance company is obligated to keep secret of the personal information provided by borrowers and shall not let out such information.

Article 30 Where any borrower fails to pay the principal and interests of his or her loan as agreed upon in the contract, a consumer finance company shall take legitimate measures to urge him or her to pay back, without taking any wrongful measures such as menace, threat and harassing.

Article 31 Where any consumer finance company violates the provisions herein, the CBRC may order it to make corrections within a prescribed limit; if it fails to correct, or its practices seriously jeopardize the sound operation of the consumer financial company and the legitimate rights and interests of its clients, the CBRC may take supervision and administration measures including suspending its business and restricting the rights of its shareholders according to different situations in accordance with the Law of the People's Republic of China on Regulation and Supervision Over the Banking Industry and other relevant laws and regulations.

Article 32 Where a consumer finance company has suffered or may suffer from credit crisis, which brings serious impacts on the legitimate rights and interests of its clients, the CBRC may take over the consumer finance company or promote its reconstruction according to law. Where a consumer finance company has any of the circumstances of illegal operation or poor operation, and its existence will seriously jeopardize financial order and the public's interests, the CBRC is entitled to cancel the company.

Chapter V Supplementary Provisions

Article 33 The main contributor as mentioned in Article 6 herein refers to the contributor whose contribution percentage is no less than 50 percent of the registered capital of the consumer finance company to be established. The general contributors as mentioned in Article 7 herein refer to other contributors other than the main contributor.

Article 34 The loan for personal consumer durables as mentioned in Article 16 herein refers to the loan granted by a consumer finance company through dealers to the borrower for his or her purchase of the agreed consumer durables including household appliances and electronic products (exclusive of house and automobile).

Article 35 The loan for general purpose personal consumption as mentioned in Article 16 and 17 herein refers to the loan directly granted by a consumer finance company to the borrower for his or her consumption items including personal and family travel, wedding, education and house decoration.

Article 36 The establishment of a consumer finance company by any contributor from Hong Kong, Macao and Taiwan shall be subject to the conditions for overseas contributors.

Article 37 The "over" or "above" mentioned herein includes the number or level specified.

Article 38 The Measures herein are subject to the interpretation of the CBRC.

Article 39 The Measures herein shall enter into force on the date of promulgation.

Source: www.fdi.gov.cn