Quality, effectiveness of financial services in focus

Chinese lawmakers have proposed making it a legislative goal to improve the quality and effectiveness of financial services in the real economy as part of a major overhaul of the country's banking supervision and administration law.

The Constitution and Law Committee of the National People's Congress reported to the NPC Standing Committee on Tuesday on revisions to the draft amendment to the law and recommended that the draft be submitted to the 24th session of the 14th NPC Standing Committee for further deliberation. The overhaul would be the most extensive revision to the law since it took effect on Feb 1, 2004.

Huang Haihua, spokesperson for the Legislative Affairs Commission of the NPC Standing Committee, said at a news conference on Friday that the second-review draft of the amendment is expected to introduce several major changes. These include adding the provision on improving the quality and effectiveness of financial services to the real economy as one of the legislative purposes of the law; aligning the law with the draft Financial Law by splitting Chapter Four — "Supervision and Administration Measures" — into separate chapters on supervisory measures and risk resolution; strengthening regulatory requirements and improving regulatory measures, including provisions for classified and tiered supervision of banking institutions; further clarifying the responsibilities of supervisory authorities and enhancing protections for banking consumers; and refining provisions on legal liability.

Some NPC Standing Committee members, NPC deputies, government departments, local authorities and members of the public called for greater accountability for banking regulators in better protecting consumers and for improvements to the relevant framework.

Proposed revisions to the draft amendment would prohibit banking institutions and their employees from engaging in conduct that harms consumers' lawful rights and interests. Such conduct would include misappropriating funds or otherwise harming the lawful rights and interests of depositors and other customers; forcing customers to bundle or purchase products or services; providing products to depositors or other customers that are inconsistent with their risk tolerance in violation of suitability requirements; and using improper methods to collect debts.

The NPC Constitution and Law Committee also proposed adding provisions stating that the banking regulatory authority under the State Council — the nation's Cabinet — shall coordinate consumer protection efforts across the banking sector, establish and improve a consumer protection framework, and establish mechanisms for handling consumer complaints and resolving consumer disputes through multiple channels.

Lawmakers also proposed revisions which concern takeover measures for financial institutions to cover broader risk-resolution measures. These would include revoking business licenses, compulsorily transferring equity, requiring institutions under takeover to repatriate overseas assets, and requiring domestic and overseas entities within the same group to provide necessary support.

The committee also proposed adding that risk resolution for banking institutions operating nationwide shall be led and organized by the banking regulatory authority under the State Council. Risk resolution for small and medium-sized local banking institutions shall be led by the province, autonomous region or municipality where the institution is registered, while the banking regulatory authority under the State Council shall strengthen guidance and cross-regional coordination, and promote risk resolution among its responsibilities.

Ding Xiangqun, minister of the National Financial Regulatory Administration, said on June 17 at the 2026 Lujiazui Forum in Shanghai that China would accelerate revisions to the banking supervision and administration law as well as the insurance law, and make targeted improvements to regulatory rules. The aim, Ding said, is to improve the alignment between financial laws and regulatory practice.

jiangxueqing@chinadaily.com.cn