The regulations, to come into effect on January 1, are the result of over two years of work of the Shenzhen Legislative Affairs Bureau and the Shenzhen branch of the People's Bank of China.

According to the regulations, institutions to deal with collecting, counseling and rating personal credit will be set up to provide credit information to banks and other users.

Such institutions must get approval from both the Shenzhen municipal government and the Shenzhen Branch of the People's Bank of China before their establishment, and undergo related industrial and commercial registration procedures. Individuals will not be allowed to set up personal credit rating services.

The regulations state that the rating institutions must get approval from the target person before collecting personal credit information, and that the information gathered must be kept confidential by the institutions and authorized users.

According to the regulations, information gathered will be divided into the following four categories:

The first is personal facts such as name, sex, birth date, career and education.

The second category includes business credit records such as loans and their payment, credit cards used and other credit records in banks.

The third covers social information such as records of tax payment and insurance.

The final category concerns special records such as civil, criminal and administrative punishments that may influence the person's record status.

The regulation will help boost the personal credit services of the commercial banks in Shenzhen, said Li Huanan, director of the Shenzhen Legislative Affairs Bureau.

He went on to explain that the establishment of such a system will better help banks avoid financial risks, and will contribute to the better management of market and social order.

Rating agencies must get approval from the target person before the gathering and rating operation to avoid infringement of privacy, he said.

(China Daily December 28, 2001)