In the past few decades, the People’s Bank of China has exercised the central bank’s functions and powers, as well as handling industrial and commercial credits and savings business. Therefore it was neither the central bank in the true sense, nor a commercial entity conforming to the law of the market economy. But since the adoption of reform and opening-up in 1979, China has carried out a series of significant reforms in its banking system, and strengthened its opening to the outside world. Consequently, the finance industry has developed steadily. By 2000, the balance of Renminbi savings deposits of all financial institutions stood at 12,400 billion yuan, and that of credits, 9,900 billion yuan. Now China has basically formed a financial system under the regulation, control and supervision of the central bank, with the state banks as the mainstay, featuring the separation of policy-related finance and commercial finance, and the cooperation of various financial institutions, and mutual complementarily in terms of functions.
In 1984, the People’s Bank of China stopped handling credit and savings business, and began formally to exercise the central bank’s functions and powers by conducting macro control and supervision over the nation’s banking system. In 1994, the Industrial and Commercial Bank of China, the Bank of China, the Agricultural Bank of China and the Construction Bank of China were transformed into state-owned commercial banks; and three policy-related banks, i.e., the Agricultural Development Bank of China, the State Development Bank and the China Import and Export Bank, were founded. In 1995, the Commercial Bank Law was promulgated, creating the conditions for forming the commercial bank system and organizational structure, and providing a legal basis for changing specialized state banks to state-owned commercial banks. Since 1996, a group of joint-stock commercial banks have appeared, the number of financial institutions has increased rapidly, and financial services have become an indispensable part of social life. Following the Asian financial crisis of 1997, in order to prevent and resolve financial risks, the People’s Bank of China set up, in 1998, a separate management, control and supervision system over banks, securities companies and insurance companies, abolished branches at the provincial level and the sub-branches below the prefecture or city level, and founded nine cross-provincial (autonomous regional and municipal) branches.