The China Banking Regulatory Commission is calling for lenders to establish internal systems for the reporting of improper conduct on the part of their staff.
On 21 March CBRC released the “Banking Sector Financial Institution Conduct Management Guidelines for Members of Industry ” (银行业金融机构从业人员行为管理指引), the goal of establishing an administrative framework for regulating the conduct of banking sector personnel.
The Guidelines require that banking sector financial institutions establish systems for the reporting of improper conduct, as well as expand “restraints and monitoring” of such conduct.
They also mandate the establishment of a banking personnel management information system and the ongoing collection of relevant information on banking personnel conduct by Chinese lenders.
According to the guidelines management of banking personnel should focus on risk, with banking sector financial institutions required to formulate detailed rules on compliant conduct, as well as ensure that staff abide by laws, regulations and disciplinary standards, and provide all staff with education and training in this area.
Lenders will conduct regular evaluations of staff, as well as establish long-term monitoring and regular inspection measures.
Banking sector financial institutions will also be required to submit personnel evaluation reports to regulatory bodies, who will in turn strengthen their evaluation, regulation and information gathering of the management of staff conduct by lenders.
Where banks fail to satisfy relevant requirements with respect to staff conduct, regulators may order the formulation of rectification plans and the performance of rectification within a stipulated timeframe.