17 Lenders Fined for Illicit Transfer of NPL’s


Bank of Communications and Ping An Bank are amongst 17 major lenders hit with administrative penalties by the China Banking Regulatory Commission for the illicit transfer of non-performing loans.

China’s banking regulator has issued a total of 25 administrative penalties to 17 financial institutions including Ping An Bank, Hengfeng Bank, Huaxia Bank China Merchants Bank, as well as three of the country’s big five lenders – Bank of Communications, China Construction Bank and the Industrial and Commercial Bank of China.

The administrative penalties amount to a total of 434 billion yuan in fines for misbehaving lenders.

On 7 April Liu Fushou, the chairman of CBRC’s regulatory department announced that the penalties related to a slew of lending misconduct, including illegal notes operations, concealing non-performing loans, abuse of channels and improper fee-taking.

Many of China’s commercial banks are taking pains to transfer or else obscure the presence of their NPL’s as many borrowers struggle against trying economic conditions.

CBRC has revealed that lenders penalised in relation to the concealment of NPL’s include Bank of Communications, China Cinda Asset Management, China Merchants Bank, Huaxia Bank, Minsheng Bank and Ping An Bank.

A total of 8 executives have received warnings or fines in relation to such misconduct.

In addition to obscuring the extent of their non-performing loan assets, Chinese lenders have been punished for a slew of other offences including non-standard wealth management products exceeding the percentage of total assets permitted by regulatory requirements as revealed by annual audit reports, and severe risk oversight in relation to internal control of commercial bills of exchange.