Banking

CBRC to introduce new supervisory rules

(Agencies)
Updated: 2010-09-13 11:18

China's banking regulator plans to introduce a set of supervisory indexes for 2011, the China Business News reported Monday, citing a source familiar with the matter.

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The China Banking Regulatory Commission (CBRC) may require banks with systematic importance to have a capital adequacy ratio (CAR) of at least 11 percent, which is 1 percentage point higher than other lenders. Lenders may also be urged to further increase their CAR by as much as 5 percentage points, the report said.

CBRC may also introduce leverage ratio as supervisory indexes. Banks may require having core capital that reaches or exceeds 4 percent of total assets, said the report.

In addition, banks must also set aside provisions of at least 150 percent of bad debts and 2.5 percent of total loans outstanding, while banks' high-quality liquid assets must exceed their net cash outflows during the next 30 days, according to the report.

The newspaper said the rules are under discussion and may be implemented in 2011.