Efforts are underway to revise the Commercial Banks Law, a preparatory project listed in this year's legislative plan by the Standing Committee of the National People's Congress (NPC).

China's banking industry has entered a new stage of growth in the last 20 years, with the number, size and business scope of banks all expanding greatly. The current law, enacted in 1995 and revised in 2003 and 2015 respectively, needs to be updated further in response to the changing environment.

The People's Bank of China, together with the China Banking and Insurance Regulatory Commission, compiled the draft revision in October 2020 and put it out for public opinions. The NPC's Financial and Economic Affairs Committee suggested accelerating the amendment process and submitting the draft to the NPC Standing Committee for review as early as possible.

In addition, a motion submitted to the fifth session of the 13th NPC in March noted that the current law fails to meet needs on many fronts, such as legislative principles,  supervision concepts, corporate governance, business rules, the protection of customers' rights and interests, and risk management.

Efforts should be made to guide commercial banks to return to core business operations and serve the real economy, promote the healthy development of financial sectors, and prevent and defuse financial risks, according to the motion. 

The motion also said that it is necessary to enhance the organizational structure of commercial banks, take a categorized supervision approach to support their professional and differentiated development, maintain fair competition-based market order, and impose tougher penalties on financial violations.