A Dozen Chinese Banks Hit with Over USD$46mn in Fines for Bill Fraud


12 Chinese banks have incurred fines worth a total of 295 million (approx. USD$46.2 million) for their involvement in a bill fraud case in the country’s northwestern Gansu province.

The China Banking Regulatory Commission announced over the weekend that its investigations had uncovered 7.9 billion yuan in bills involved in the fraud at a sub-branch of the Postal Savings Bank of China (PSBC) in the Gansu province city of Wuwei.

According to CBRC the case involved the forgery of documentation and embezzlement of wealth management funds.

“Bank staff colluded with outsiders to carve official seals without permission, used fake papers and contracts, illicitly conducted inter-bank wealth management business and bill discounting, and illegally drew and embezzled funds” said CBRC in an statement.

The CBRC investigation established that funds obtained from the Jilin Jiaohe Agricultural Bank via the sale of wealth management products had been embezzled by the Wenchang road branch of PSBC in Wuwei.

Investigation further determined that former branch head Wang Jian (王建) had illegally used his position of authority to obtain funds from bills with a face value of 7.9 billion yuan, as well as illegally embezzle 3 billion yuan in wealth management funds.

CBRC has issued a fine of 90.5 billion yuan to the PSBC’s Wuwei branch, and banned the vice-branch head and three other staff members from holding executive positions for a period of 2 – 5 years.

The regulator has placed a lifetime ban on Wang Jian, former head of the Wenchang road sub-branch, from employment in the banking sector, and transferred his case to the judicial authorities.

Jilin Jiaohe Agricultural Bank has been hit with a fine of 77.44 billion yuan for the illicit purchase of wealth  management products, while both the bank chair and head have been banned from holding executive positions for a two year period.

Jilin Jiaohe’s supervisor has received an administrative warning, and its capital operations officer and financial marketing department chief have been banned from pursuing work in the banking sector for a two year period.

Ten other banks received fines worth a total of 127.5 million yuan, including the Bank of Shaoxing, the Zhenjiang branch of the Bank of Nanjing, the Bank of Xiamen, the Bank of Hebei, Great Wall West China Bank, the Hunan Hengyang Hengzhou Agricultural Bank, the Heibei Dingzhou Agricultural Bank, the Guangdong Nanyue Bank, Handan Bank, and Qian’an County Rural Credit Society.

33 relevant personnel from these banks received administrative penalties, while the executive qualifications of three were rescinded, and one staff member has been banned from pursuing work in the banking sector.

The case arrives just after CBRC issued a $72 million fine to Shanghai Pudong Development Bank for concealing non-performing loans at its Chengdu branch, prompting domestic media to observe that the moves signal tighter regulation and heftier penalties for the Chinese banking sector in 2018.