China Banking and Insurance Regulatory Commission issues notice to standardise administrative inspections and generally limit on-site checks to two per institution per year

The China Banking and Insurance Regulatory Commission published a notice setting out system-wide requirements to standardise administrative inspections, curb excessive inspection activity, and reduce the compliance burden on financial institutions. As a general rule, on-site inspections of the same institution should not exceed two within a year, alongside tighter internal controls over inspection planning and approvals. The notice focuses on three dimensions. Frequency is to be controlled through stricter project initiation and approval procedures and improved coordination of inspection plans, while allowing exemptions from the annual cap when inspections are necessary based on leads such as petitions, complaints, assigned or referred matters, or data monitoring. Precision is to be increased through a risk-based, differentiated approach that uses factors including supervisory ratings to select targets and conduct tiered and categorised inspections. Intensity is to be calibrated under a proportionality principle, using a mix of tools such as regulatory interviews, warning and admonition measures, situation notifications, rectification deadlines, and administrative penalties, with encouragement to use more flexible enforcement approaches where appropriate. The regulator indicated it will continue guiding its system to implement measures aimed at reducing burdens on enterprises while advancing its broader priorities of risk prevention, stronger supervision, and supporting development.