Analysis on the market access and exit legal issues of online banks and the conflict between the bill legal system
As an emerging financial service model, online banking has attracted increasing attention on its market entry and exit legal issues. In our country, the market access and exit system of online banks, as well as the conflict with the traditional bill legal system, constitute an important legal environment for its sustainable development.
Market access issues of online banking
According to the “Banking Supervision Law of the People’s Republic of China”, the establishment of a commercial bank in China requires review and approval by the banking regulatory agency of the State Council. At the same time, the “Commercial Bank Law of the People’s Republic of China” stipulates that the establishment of a commercial bank must have of five conditions. This strict market access system is particularly important for countries that are not yet fully developed. However, with the development of Internet technology, the market entry costs of online banks have been significantly reduced, and the competitive advantages faced by traditional commercial banks have been weakened. Therefore, there is a contradiction between the current market access system and the flexible and rapid establishment characteristics of online banks.
The market exit problem of online banking
The operational risks of online banks are generally higher than those of traditional banks. The bankruptcy of any online bank may trigger a chain reaction and affect the stability of the entire financial system. Therefore, the Banking Supervision Law and the Commercial Bank Law have formulated clear regulations on the market withdrawal of banks. Nonetheless, how to effectively manage the exit of online banks in the face of emergencies is still an urgent task that needs to be solved, which is crucial to the healthy development of the banking industry.
Conflict between online banking and bill legal system
my country’s “Bills Law” mainly requires the form of paper bills and does not cover online banking services using electronic bills. Within this framework, significant legal friction exists between the signature requirements for traditional notes and the alternative use of customer passwords in online banking. In particular, in the absence of clear provisions on the legal validity of electronic bills, its legality is difficult to guarantee. In addition, the endorsement, transfer, acceptance and prompt payment of bills also face incompatibility problems with online banking business methods. The 2004 revision of the Negotiable Instruments Law of the People’s Republic of China failed to resolve these conflicts, and the existing provisions were no longer able to meet the development needs of online banks.
Standardization of market access and exit systems for online banks
In order to effectively manage the market access of online banks, financial institutions should register with the financial regulatory authorities and provide necessary materials before conducting online business. It is necessary for regulatory agencies to cooperate with tax authorities, financial authorities and other relevant units to keep abreast of the activities of financial institutions in online business and ensure that they conduct business within the approved scope. At the same time, the “Interim Measures for the Management of Online Banking Business” stipulates six basic conditions for traditional banks to carry out online banking business, including application, approval and registration procedures.
The exit system for online banks also needs to be established and improved, especially in a complex financial environment. If an online bank does not meet operating conditions, it must exit in a timely manner to reduce negative impacts. To this end, it is particularly important to establish provisions such as early warning, takeover, emergency relief, lender of last resort system and deposit insurance system, which will effectively reduce the impact of the withdrawal of online banks on the market.
Through an in-depth analysis of market access, exit, and conflicts with the bill legal system of online banks, more appropriate legal protection can be provided for the development of my country’s online banks and promote their healthy and orderly development.