In order to establish an internal control system that meets the requirements of the Basic Standard for Enterprise Internal Control jointly issued by the Ministry of Finance, China Securities Regulatory Commission, Auditing Department, CBRC and China Insurance Regulatory Commission, the Industrial Bank officially launched the “Internal Control Evaluation System” project in May 2009.

As of October, 2009, the preparations for phase 1 and the trials for phase 2 in the Shanghai and Shenzhen branches had been completed. In order to take full advantage of results gained from the compliance management system, integrate existing resources, and in an attempt to unify the basis of both operation and evaluation, the head office internal control committee has decided to integrate the internal control evaluation system with the compliance management system on a trial basis in the Nanjing and Chongqing branches.

Unlike the internal control evaluation pilots previously conducted in the Shanghai and Shenzhen branches, this pilot attempts to meet regulation requirements. It will enable the Industrial Bank to identify internal control defects, take remedial action and establish a set of economic and efficient implementation processes and internal control supervision mechanisms for sustainable use whilst allowing for the formation of conclusions on the overall effectiveness of internal control. On the other hand, it also aims to complement and improve the original internal control compliance management system. That is, take full advantage of the results of the compliance management system and self-evaluation tools in internal control to integrate resources. This means that the results of the pilot project can meet the branch’s internal control self-evaluation requirements and further realize the goal of boosting branch risk control and optimizing business processes.

In the following stages, the Industrial Bank will, based on the pilot work and the practical situation of the bank, make adjustments to the existing compliance management system and complete the formulation of the daily operation regulations of the internal control compliance management system and promotion templates across the Industrial Bank. It will keep on advancing system construction so as to further facilitate the sustainable development of the bank’s management and business whilst satisfying regulatory requirements.