Bank Settlement Accounts

Bank Settlement Accounts

• Bank settlement accounts refer to RMB current deposit accounts opened by depositors in operating banks for the purpose of handling fund receipt and payment settlements.

Classification of Bank Settlement Accounts

• Bank settlement accounts are categorized based on depositors into unit bank settlement accounts and individual bank settlement accounts.
• Unit bank settlement accounts are opened by depositors under the name of the unit.
• Bank accounts opened by individual industrial and commercial households using their business name or operator name are managed as unit bank settlement accounts.
• Individual bank settlement accounts are opened by depositors in their natural person name using their personal ID.
• Bank settlement accounts opened by individuals due to the use of debit cards or credit cards at banks or postal savings institutions are managed as individual bank settlement accounts

Unit Bank Settlement Accounts by Purpose

• Unit bank settlement accounts are divided into basic deposit accounts, general deposit accounts, special deposit accounts, and temporary deposit accounts based on their purpose.

Basic Deposit Accounts

• Basic deposit accounts are main accounts for depositors.
• These accounts primarily handle fund transfers related to the depositor's daily business activities
• These accounts also handle withdrawals of wages, bonuses, and cash.

General Deposit Accounts

• General deposit accounts are opened by depositors for reasons such as loans or other settlement needs, in bank business institutions "outside of the bank where the basic deposit account is opened".
• These accounts handle fund receipts and payments for "loan transfers, loan repayments, and other settlements".
• Cash deposits can be processed through this account, but cash withdrawals are not allowed.
• There is no limit to the number of general deposit accounts that can be opened.

Special Deposit Accounts

• These are bank settlement accounts opened by depositors in accordance with laws, administrative regulations, and rules to manage and use funds for "specific" purposes in a "dedicated" manner.

Temporary Deposit Accounts

• Temporary deposit accounts are opened by depositors for temporary needs and for use within a specified period.
• These accounts handle funds for temporary organizations and temporary business activities.
• Settings include the establishment of temporary agencies like project headquarters/ groups/ teams, off-site temporary activities like construction and installation units operating in different locations, registration for capital verification and increased capital verification situations.
• Military and armed police units undertaking basic construction or performing combat, exercise, disaster relief, and emergency response tasks may also use temporary deposit accounts.
• The validity period of a temporary deposit account cannot exceed two years.
• Cash withdrawals from temporary deposit accounts should be handled in accordance with national cash management regulations.
• Temporary deposit accounts for registered capital verification only receive payments during the verification period, the registered capital should be consistent with the investor's name.

Individual Bank Settlement Account

• Individual bank settlement accounts are used for handling personal transfers, income, and cash withdrawals.
• All legal personal income may be transferred into the bank settlement account.
• Examples of revenue: wages, bonuses, royalties, income from performances, principal and income from investments such as bonds, futures, and trusts
• Examples of revenue: personal creditor's rights or property rights transfer income, personal loan transfers savings, securities transaction settlement funds and futures transaction guarantees, inheritance, gift items, insurance claims/premium refunds, tax refunds, sales income from agricultural/sideline/mineral products , and other legal income
• Required documents for opening an account: ID card, household register (if under 16), supporting documents.
• Related documents: passport, military officer ID, police officer ID, etc.,
• When a unit pays an amount of "over 50,000 yuan" to an individual bank settlement account from its bank settlement account, it must provide payment documentation to its opening bank.
• If a unit's payment to an individual bank settlement account is taxable, then withholding units should provide a "tax payment certificate" to their opening bank.

Basic Principles for Bank Settlement Account Management

• One Basic Account Principle: Only one basic account is allowed.
• Free Choice Principle: Unless otherwise stipulated by national laws, administrative regulations, and the State Council, no unit or individual may force a depositor to open a bank settlement account at a designated bank.
• Compliance Principle: Compliance with laws and regulations is required.
• Deposit Information Secrecy Principle: Aside from instances specified by national laws or administrative regulations, banks reserve the right to deny any unit or entity the ability to make inquiries.

Opening, Changing, and Canceling Bank Settlement Accounts

• Opening: Depositors shall open an account via "real name" and be responsible for the authenticity of all application documentation.
• Opening time differs for non-corporations versus corporations
  • Non-corporate entities are subject to a verification-based account, where the process begins when the The People's Bank (local branch) approves the account establishment within two working days. A license is then awarded
  • Corporate entities must first have corporate basic deposit account info recorded before management generates the "basic deposit invoice number". Effective then begins same day the account opens, permitting billing.
• Changing:
  • To change the depositor name, legal representative, address, and other details requires submitting a change application to the opening bank.
  • Other requirements: A written notice must be given to the opening bank within five working days.
• Cancellation:
  • Account can be cancelled if the account has closed down, will be closed, or there are other reasons for withdrawl
  • Time constraint is 5 working days, same as changing the account
  • Process includes: first, cancel the general deposit account, special deposit account and then the temporary deposit account. Following this, transfer the account funds to the basic account before cancelation.
  • Situations in Which Cancellation Is Prohibited: Outstanding bank debt
  • Mandatory cancellation occurs if, for over a year, there have been no payments or bank liabilities present on the bank account. Notice is given, but the account is seen as voluntarily closed after 30 days has passed.

Penalties for Violations

• Penalties for Depositors Violating Account Management Regulations depend on whether said depositor is a business or not a business.
  • "Non-business depositor" & "business depositor are considered distinct
  • Non-business depositors are fined under 1,000 yuan
  • Business depositors are fined at the following 3 scales, depending on the severity of the infraction
    • 1. 1,000 yuan
    • 2. Between 10,000 yuan up to 30,000 yuan
    • 3. Between 5,000 yuan to 30,000 yuan

Bank Account Penalties

• Penalties vary on the type of infraction