A PBOC spokesman said the purpose of the draft procedures and seeking public feedback was to carry out China's pledge to open up its motor vehicle loan financing market after its World Trade Organization entry, and to standardize the motor vehicle financing sector and administration.

Motor vehicle finance institutions were non-bank institutions which provided loans for buyers of motor vehicles within China and engaged in related financial business, he said. They included Chinese-funded, Sino-foreign joint ventures and wholly foreign-funded institutions.

The procedures stipulate that a sponsor of a motor vehicle finance institution should have at least 8 billion yuan (about US$967million) or the equivalent in total assets in the past year, total investment should not exceed 50 percent of net assets and it should have been profitable for three successive years. Fornon-financial institutions, year-end net assets should be no less than 30 percent of total assets; for financial institutions, accessible capital should not be below 10 percent.

According to the procedures, the registered capital of a motor vehicle finance institution should be at least 500 million yuan (about US$60.46 million) or the equivalent.

The procedures detail rules for setting up motor vehicle finance institutions, their risk control and supervision, business scope and penalties.