Jilin Province Financial Office Interprets "Jilin Province Interim Measures on the Supervision and Management of Small Loan Companies"
To implement the major deployment of the provincial Party committee and government to highlight the development of private economy and strengthen the financial services, on September 16, 2013, the provincial financial office, together with other eight departments including CBRC Jilin Province, PBC Changchun Central Branch, the provincial finance department, the provincial public security bureau, the provincial industry and commerce bureau, the provincial audit department, the provincial national taxation bureau and the provincial local taxation bureau, issued "Jilin Province Interim Measures on the Supervision and Management of Small Loan Companies" (hereinafter referred to as "Interim Measures"). To felicitate the understanding and participation in the supervision, the relevant issues are interpreted as follows.
1. The importance and necessity to strengthen the supervision of small loan companies
Considering the current requirements of the province's economic development and characteristics of small loan companies, it is of great significance to strengthen the supervision of small loan companies. First, the province currently highlights the development of private economy. The provincial government stresses the vigorous development of small loan companies and requires small loan companies to achieve a breakthrough development in quantity, size of funds and serving small and micro enterprises and the real economy. In order to ensure the realization of this goal, they have to strengthen the standardized management of small loan companies is an indispensable requirement to promote the development of small loan companies. Currently, the province has nearly 500 small loan companies, which still have some non-compliance issues in operating from the operating situation. Only strengthening supervision and standardizing business activities of small loan companies can make small loan companies to play a positive role, continue to grow in serving the economy and society and try to avoid bringing a negative impact to the economic and social development as much as possible. Second, it is an inevitable requirement of small loan companies' own development. Small loan companies are a beneficial exploration to regulate private financing and develop new civil financial organizations and its direction of reform and development is "transforming conditional small loan companies to community or village banks absorbing social funds and serving local areas", which has a guiding significance and positive promoting role for the development of small loan companies and puts forward higher requirements to the supervision work. Only strengthening the regulation and supervision can lay a good foundation for small loan companies' future transformation.
2. The scope and object of the supervision work
The "supervision work" mentioned in the Interim Measures refers to the supervision of business activities of small loan companies. The establishment, approval and other related work will be otherwise specified. The objects refer to small loan companies verified and approved by the provincial finance office, registered in the industry and commerce department and carrying out small loan business in accordance with the relevant provisions as well as small loan companies approved by the provincial finance office to be included into the province's pilots.
3. The main supervision contents
The supervision of small loan companies in the Interim Measures is in accordance with the general principle "comprehensive standardization and key supervision". There are five key-supervised aspects in the Interim Measures. First, strictly forbid small loan companies to engage in illegal fund-raising activities. They are not allowed to conduct internal or external fundraising activities in any name or way and absorb the public deposits or absorb the public deposits in a disguised form. Second, strictly monitor the source and use of loan funds. Raise capital in accordance with the provisions and not allowed to remove the principal. Third, strictly regulate the loan interest rate. Small loan companies' loan interest rate shall not exceed four times of the same-period benchmark loan rate announced by the PBC and are not allowed to grant usurious loans. Fourth, grant loans in strict accordance with the regulations and outside-account management is not allowed. Fifth, they are not allowed to collect loans in illegal means. In addition to the aforesaid main contents, small loan companies should carry out business according to the provisions and should not engage in new business or cross-regional operation without allowed; report relevant information according to the regulations and in a timely and accurately manner; announce and promise related matters to the public according to the rules.
Fourth, the main form of supervision
Small loan companies are supervised mainly through off-site inspections, spot checks and external audits, supervisory ratings, social supervision, etc. and given full-course tracking and all-aspect regulation.
The first is regular off-site inspections. Small loan companies are required to report loan granting, fund sources, fund use, interest rate execution, liquidity position, financial condition and other statistical data and relevant information to local authorities and relevant departments on a monthly basis; local governments' authorities at all levels and relevant departments are required to report relevant information to the upper-level authorities and relevant departments level by level on a monthly basis.
The second is irregular spot checks. Local governments' authorities at all levels are required to conduct on-site inspections of small loan companies under their jurisdiction at least once a year; small loan companies' main supervisors insist on recurring inspections to know small loan companies' business circumstance at all times and promptly correct their irregularities.
The third is establishing an analysis report system. Local governments' authorities at all levels and relevant departments report small loan companies' supervision analysis reports to the upper-level authorities and relevant departments in the middle or at the end of a year, make overall assessment of small loan companies under their jurisdiction and put forward supervision opinions and suggestions.
The fourth is accepting social supervision. All levels of competent (supervision) authorities set up and publicize small loan companies' supervision and reporting telephones to accept social supervision.
5. The organization and implementation of the supervision work
(1) The supervision of small loan companies is based on the department responsibility division working system under the guidance of the province's steering group of small loan company pilot work. The provincial financial office is the competent department of small loan companies to be responsible for the organization, coordination and promotion of the province's small loan company pilot work and works together with CBRC Jilin Province, PBC Changchun Central Branch, the provincial finance department, the provincial public security bureau, the provincial industry and commerce bureau, the provincial audit department, the provincial national taxation bureau, the provincial local taxation bureau and other relevant departments to study and formulate the small loan company supervision system and coordinate and solve major supervision problems. All relevant departments perform their supervision duties in accordance with the division of responsibilities and guide local governments to do the supervision and management and risk prevention and disposal of small loan companies well.
(2) Local governments undertake the supervision and management and risk prevention and disposal responsibilities of small loan companies and the competent authorities are in charge of small loan companies' daily supervision; local banking regulators, PBC's branches and sub-branches, finance, public security, industry and commerce, audit, taxation and other relevant departments perform their supervision duties in accordance with the division of responsibilities and cooperate with the competent authorities to do related work well.
(3) Main supervisors, account-opening banks and industry associations, under the guidance of the competent (supervision) authorities, do the supervision-related work well in accordance with their responsibilities.
6. The punishment of small loan companies' law- and regulation-violating behaviors
According to the principle of standardizing the management behavior and promoting the healthy development, small loan companies' law- and regulation-violating behaviors are supervised in a differentiated approach. First, severely punish small loan companies' six law-violating behaviors, such as illegal fund raising, absorbing the public deposits, recovering debts by illegal means, outside-accounting operation, granting loans violating the regulated interest rate, raising and using funds violating the rules and illegally providing or selling information. In addition to canceling the pilot qualification, they must transfer them to relevant authorities based on the situation to be dealt with according to law and resolutely stop small loan companies' illegal behaviors from disrupting the economic and financial order and affecting the social stability. Second, it should take the "sickness-curing" approach for small loan companies' seven illegal behaviors, such as engaging in new business or cross-regional business without unauthorized, changing the supervision items without unauthorized, granting loans beyond the prescribed proportion; failing to submit information according to the provisions or reporting false information, adverse credit records in the business activities, refusing or hindering the inspection and supervision of the supervision authorities as well as other irregularities identified by county-level governments' competent(supervision) authorities, and promote them to correct and achieve a healthy development; authorize the steering group to study to cancel the pilot qualification, revoke the business licenses or give other treatments for the serious and incorrigible circumstances.