The China Banking Regulatory Commission plans to clean up unqualified existing shareholders of Chinese commercial banks within one year after tightening bank shareholding rules in early January.
The regulator said March 9 that for shareholders that acquired more than 5% of the total capital or equity in a commercial bank before the rules were issued in January without pre-approval, they will need to seek shareholder qualification from the CBRC within six months from Jan. 5, when the bank shareholding rules took effect.
Further, commercial lenders will have to identify the controlling shareholders affiliates, persons acting in concert and ultimate beneficiaries of their major shareholders, and to report that to the CBRC within three months' time.
If an investor and its affiliates and persons acting in concert are a major shareholder of more than two commercial banks, or a controlling shareholder of more than one commercial bank, the CBRC will gradually guide them to comply with the bank shareholding rules by reducing both the proportion and the number of shares they hold on the banks.
For investors and their actual controllers, affiliates and persons acting in concerts that hold more than a 5% stake in a commercial bank through financial products, the CBRC will give them a period of one year to rectify problems.
Additionally, in another circular, the CBRC ordered shareholders that hold their stakes of between 1% to 5% in a commercial bank to report to the CBRC within 10 days after the acquisition of the stake. The CBRC will scrutinize whether such shareholders use their own funds to invest in commercial banks and whether they are compliant with existing rules.
