China’s draft amendment to the Banking Supervision Law has been submitted to the
NPC Standing Committee for a second review. The second‑review draft adds a
dedicated risk‑resolution chapter, strengthens consumer protection and for the
first time legally codifies classified/graded and differential supervision. It
instructs banking regulators to grade institutions by type, balance‑sheet scale,
risk profile and systemic importance and apply differentiated supervision
accordingly. Huang Zhen, director of the Financial Law Research Institute at the
Central University of Finance and Economics, said differential supervision must
follow a dual logic: permit measured tolerance innovation for well‑governed,
soundly risk‑controlled banks, while strictly restricting complex innovation and
business expansion at high-risk institutions.
