Procedures Regulating Commercial Banks Credit Cards

China

(enacted in 2011)

The procedures set qualifications for commercial banks credit cards business. With good reputation, management, enough capital, managerial personnel, professional operations system of bank cards, technical support, banks are allowed to develop credit card business. Approval of issuing cards should be received from CBRC and its branches. Newly increased categories, functions, and business of credit cards should refer to regulations on new credit cards.

For issuing credit cards, banks are required of following:

Internal rules on management of credit cards about responsible and operation procedures;

Educated and professional marketing personnel;

Investigation on credit records to insure reliable income of applicants;

Applicant’s information, fees, and credit limit included in application;

Safe delivery of credit cards;

Management of dynamic information of credit limit and repayment of card holder;

Banks can only increase credit limit once in one credit cycle.

For first time applicants:

Credit cards should not be issued by credit card auto-processed system.

Under 18 old age(except for supplementary credit cards) students should not be issued credit card.

Banks should get formal repayment guarantee from parents or other guardians of student applicants.

For management of credit cards:

Banks provide loss reporting, information query, billing, complaint process, renewal expired cards, reminder of repayment, account collection and personal repayment service.

Banks should keep customers information secure, prepare for emergence, has good skills of risk management.

Banks should prepare credit cards annual assessment report to regulatory authority(CBRC). CBRC and its branches regulate credit cards service.

Other banking institutions should comply with this procedures on credit cards business.

This procedure is in eight chapters:

Chapter I General Provisions

Chapter II Definitions

Chapter III Qualification

Chapter IV Management of Issuing Credit Cards

Chapter V Management of Merchant-Acquiring Services

Chapter VI Management of Risk

Chapter VII Regulation

Chapter VIII Supplementary Provisions