The full text of Article 13 Provisions on Preventing Operational Risks formulated by China Banking Regulatory Commission is as follows:

Notice on Strengthening the Prevention of Operational Risks

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All policy banks, state-owned commercial banks, joint-stock commercial banks and banking regulatory bureaus:

At present, the ability of banking institutions to identify and control operational risks can not adapt to business development. Some banking institutions have imperfect related systems, or lack of effective supervision over the implementation of the systems, ineffective investigation and punishment of those who fail to implement the systems, weak risk management and internal control, and frequent major cases, resulting in a large amount of financial losses for banks. Therefore, all banking institutions must intensify their work and take further measures to effectively prevent and control operational risks. All banking regulatory bureaus should pay close attention to the operational risks of banking financial institutions and earnestly do a good job in the supervision and spot check of this notice at the grassroots level.

First, we attach great importance to the construction of rules and regulations to prevent operational risks. For those who have no rules and regulations, but have not adapted to the current business development and the actual management of grass-roots banks, the superior bank should conduct special research and formulate or revise them in time. The head office should promptly and seriously study and solve the problems of rules and regulations proposed by grass-roots banks and relevant departments. Those who do not act according to the regulations should be removed from their original posts and dealt with severely.

Second, strengthen audit construction. We should constantly improve the audit system, enrich the audit force, strengthen the training of the audit team, and improve the political and professional quality. Business departments and audit departments should organize independent and cross-cutting surprise inspections of business units, especially grass-roots business units, and establish a continuous follow-up inspection system for doubtful points and weak links; The Head Office and related superior banks shall supervise and evaluate the implementation of the follow-up inspection system, emphasizing effectiveness, seriousness and independence.

Three. Strengthen compliance supervision of grassroots banks. For grass-roots banks with excessive power and inadequate supervision and management, we should focus on strengthening supervision and urge them to rectify in time; It is necessary to supervise and monitor power to prevent abuse of power and lack of supervision.

Four. Establish a responsibility system, clarify the responsibilities of the head office and branches at all levels, and form a clear system guarantee. Managers at all levels, especially the principals and senior executives of all walks of life, should conscientiously perform their duties, dare to grasp and manage, and set an example. For major cases, important cases or ineffective measures, it is necessary to strictly investigate the responsibilities of senior executives and those directly responsible. For those who conceal the problems found in the inspection, conceal false information or check and urge the rectification to be ineffective, the responsibilities of audit departments and personnel should be investigated accordingly. The legal responsibilities of relevant senior executives and managers should be strictly investigated for the units where major cases occur repeatedly and the problems cannot be effectively solved for a long time.

Five, adhere to the relevant administrative management system. Self-assessment should be carried out regularly on weak links, and external audit institutions should be invited to conduct independent assessment. It is necessary to further expand the supervision of banks by the society and the news media. For major cases that can be made public, it is necessary to strengthen information disclosure, timely introduce detailed rectification plans and specific measures, correctly guide public opinion, and strive for initiative. Through public supervision, prevent banks from slacking off in operational risk management and prevent managers from neglecting their duties and abusing their powers. Executives from all walks of life should work together, pay attention to random inspections at the grassroots level, go to places with many problems, conduct in-depth investigation and study, and help the grassroots solve problems.

Establish and implement the system of rotation and compulsory leave for grass-roots supervisors, and ensure that this arrangement is included in the personnel management system of the head office and branches at all levels. The specific operating procedures and regulations need to be clarified, and the personnel department should make corresponding arrangements in advance for the replacement of the supervisor to be rotated in accordance with the regulations. The audit department shall effectively audit and track the relevant institutional arrangements and implementation.

Seven, strictly regulate the behavior of staff in important positions and sensitive links within eight hours, and establish the corresponding behavior anomie supervision system. The audit department shall establish an internal reporting system for the stock trading behavior of the staff in these positions and links, and clarify the specific operating procedures and regulations. Anyone who finds that there are pornographic, gambling, drug-related, unreported stock trading and business-run enterprises should be immediately transferred from their original posts and audited. It is necessary to understand the situation in a timely and in-depth manner and educate employees who have misconduct in a timely manner. If the circumstances are serious, it should be dealt with severely according to the law and regulations.

Eight, to report verified cases, informants belong to employees from the grassroots (including contract workers, temporary workers), to be rewarded; For those who insist on rules and regulations and dare to struggle, there should be special incentive mechanisms and regulations to prevent cases from happening. Management personnel who violate laws, regulations and disciplines shall be removed from their original work units and dealt with severely once verified.

Nine, strengthen and improve the timely reconciliation system between banks and customers, banks and banks, bank internal business ledgers and accounting accounts, and make clear provisions on reconciliation frequency, reconciliation objects and personnel who can participate in reconciliation. At the same time, it is necessary to improve management concepts and technical means.

Ten, strengthen the control of outstanding accounts and error handling, accounting posts and reconciliation posts must be strictly separated, and resolutely do not return to the original post to check outstanding accounts and errors. It is necessary to set up an independent audit post and establish a responsibility investigation system. When necessary, the designated post can be independently audited by the superior bank, and the original post is instructed to make a timely explanation.

Eleven, strict seal, cipher, certificate storage and destruction system, resolutely implement the provisions of the system, and carry out strict inspection, severely punish violators.

Twelve, strengthen the monitoring of possible off-balance sheet business. Check the bills issued on the same day and check all the bills printed by the machine. We should not only explore effective monitoring measures under artificial conditions, but also explore effective means to verify and re-examine customers under the condition of multi-department business of universal deposit and withdrawal of outlets.

When making large deposits and opening accounts for new customers, we should strictly follow the principles of "Know Your Customer" (KYC) and "Know Your Customer's Business" (KYB), gain insight into and understand all the main information of customers, and understand the basic situation and changes of their business and financial management; For large-value billing and invoicing, procedures must be set according to different quotas, which shall be verified by the grass-roots bank or independently reviewed and approved by the superior bank. It is necessary to establish contact and verification system with two or more customer supervisor hotlines. For old customers, regular spot checks are also needed. If it exceeds a certain amount, it shall be carried out by the indirect business handling post of the superior bank and the grass-roots bank, and pay attention to the verification with the relevant hotline contact person of the enterprise to obtain confirmation. Commercial banks should carefully verify the usage of all customer billing services, strictly follow the principle of "Know Your Customer Business Documents" (KYD), be familiar with and review all documents and key columns, and strictly control them. For uncooperative enterprises, it is necessary to strictly review the business that happened before and take corresponding control measures.

Thirteen, quickly improve the scientific and technological information system, improve the ability to prevent business risks through technical means, support the timely and accurate generation of all kinds of management information, and provide a solid foundation for business review and audit department inspection.

All banking regulatory bureaus are requested to forward this notice to city commercial banks, urban credit cooperatives, provincial rural credit cooperatives, rural commercial banks and rural cooperative financial institutions within their respective jurisdictions, please refer to the implementation.

China Banking Regulatory Commission

March 22(nd), 2005

Internal control "ten linkage construction" is

"Ten Linkages" to Prevent Operational Risks

(1) In view of the high incidence of bill business cases, the practice of collecting deposits in accordance with regulations and implementing deposit custody of other banks is implemented, and the practice of opening accounts, posting accounts and managing deposits by banking financial institutions is prohibited;

(2) Linkage between the management of front-line business cards, certificates and seals and the management of administrative seals of grass-roots institutions;

(3) The presidents of grass-roots banks and the directors of business outlets exchange posts regularly, and the accounting supervisor implements the matching linkage of appointment system;

(4) Matching and linkage between compulsory leave for important posts and post audit;

(5) Encourage grass-roots employees to expose and report, and support and link up the employee protection system;

(six) the matching and linkage between the due diligence of the loan "three investigations" and the responsibility system for the safekeeping of files (paper or electronic media);

(seven) improve the audit system, strengthen the audit function, and strengthen the supporting and linkage of the audit accountability system;

(eight) the matching and linkage of the construction of the two-way assessment system with the same penalty in place;

(nine) the matching and linkage between case investigation and information disclosure system construction;

(10) Support the construction of incentive and restraint mechanism of linkage grass-roots operational risk award (praise, award) and penalty (penalty, penalty);

The "six key links" of case management are:

"Six Key Links" to Prevent Operational Risks

Authorization card (teller card), seal password, blank voucher, vault trunk, inquiry and reconciliation, and rotation.

also

"Ten Measures" to Prevent Operational Risks

(1) Improve relevant laws and regulations and intensify the crackdown on bank crimes. Study and request the relevant departments to amend the relevant provisions of the criminal law and clarify the relevant judicial interpretation; Study and revise the "Measures for Punishment of Financial Violations" and increase the administrative punishment for financial violations; Clarify the provisions on creditor's rights protection in the Enterprise Bankruptcy Law, and fully protect the legitimate rights and interests of creditor institutions; Study the problem of expanding inspection power and increase effective supervision means.

(two) the implementation of major cases of accountability system, and earnestly implement the leadership responsibilities at all levels. The CBRC will work with relevant departments to formulate provisions on accountability for major banking cases as soon as possible.

(3) Strengthen the management of taking up posts and performing duties, and implement dynamic supervision over senior executives. Further improve the Measures for the Administration of the Qualifications of Senior Managers of Banking Financial Institutions and formulate the Measures for the Supervision of Senior Managers of Banking Financial Institutions.

(4) Strengthen the internal auditing power of banking financial institutions and enhance the ability of self-correction. Formulate internal audit guidelines for banking financial institutions as soon as possible to help and urge banking financial institutions to solve the problem of insufficient independence and authority of internal audit at this stage.

(5) Strengthen the construction of information technology system for supervision of banking financial institutions and improve the level of informatization.

(six) improve the accounting statistics related system, strengthen the management of intermediary institutions.

(seven) to improve the ability of banking financial institutions to deal with emergencies, study and formulate measures to control the loss of cases, strive to control and reduce the possible economic and reputation losses caused by banking cases, and earnestly safeguard financial stability.

(8) Actively promote the reform of state-owned commercial banks and improve the corporate governance structure.

(9) Improve the disposal methods of non-performing assets and do a good job in case management of asset management companies.

(10) Improve the effective supervision level of the CBRC and give full play to the advantages of professional supervision.