ABSTRACT
By the 1940s Chinese as well as foreign banking institutions had reached a high level of sophistication in the country's commercial centers, and modernization was making headway in the hinterlands. During the 1950s China's many commercial banks were closed. Reestablishing the institutional framework of the banking system began with Deng Xiaoping's reforms in 1979, one of the first steps being to renew an independent identity and role for the Agricultural Bank of China. A major step in reforming the banking system was the promulgation of two basic laws in 1995. They are: the Law of the People's Bank of China (PBOC) passed by the National People's Congress (NPC) on March 18, and the Commercial Banking Laws of China, passed by the NPC Standing Committee on May 5. These laws gave legal basis to a number of critical reform elements such as the PBOC's role as the Central Bank and chief supervisor and regulator of the banking system.
