File photo shows a worker counts Chinese currency Renminbi banknotes at a bank in Tancheng County of Linyi City, east China's Shandong Province. Photo:Xinhua

Chinese regulators issued an exposure draft on Saturday to solicit public opinions on the management measures of commercial banks' capital, as they consider dividing commercial banks into three layers to match with different supervision schemes.

The China Banking and Insurance Regulatory Commission (CBIRC) and the People's Bank of China revised previous regulations and put forward a draft to further improve the capital regulation rules for commercial banks, encourage banks to enhance risk management and improve the quality and efficiency of banks in serving the real economy.

Among the major revisions, the regulators are considering differentiated capital supervision systems, so that the supervision can match the size of banks' assets and the complexity of their businesses and reduce the compliance costs of small- and medium-sized banks, according to a note published on CBIRC’s website.

Under the plan, commercial banks will be divided into three layers according to their business scales and risk differences, and to match with different capital supervision schemes. 

Large scale banks or those with more cross-border businesses will be classified into the first tier and their capital will be supervised by international standard rules. Banks with relatively small assets and cross-border operations will be placed in a second tier and be supervised by relatively simplified rules, read the note.

The third tier, mainly commercial banks with a size of less than 10 billion yuan ($1.46 billion), will be subject to further simplified capital supervision rules and will be guided to focus on serving counties and small- and micro-businesses.

Differentiated capital regulations will not lower capital requirements. On the premise of maintaining the overall soundness of the banking industry, it is expected to stimulate the financial vitality of small- and medium-sized banks and reduce the compliance costs of them, officials from the regulators told media in a statement.

The draft also comprehensively revised the rules for measuring risk-weighted assets, asking banks to develop effective policies, procedures, and measures to timely and fully monitor risk changes of their clients, and to improve information disclosure standards.

Global Times