Trio of Listed Chinese Banks Hit with Over 180mn Yuan in Fines


The China Banking and Insurance Regulatory Commission (CBIRC) has issued 2018’s first set of fines for regulatory infractions to a trio of listed Chinese banks.

The three banks are China Merchants Bank, which has received total fines of 65.73024 million yuan, the Shanghai Pudong Development Bank, which has received total fines of 58.55927 million yuan and Industrial Bank Co., which has incurred total fines of 58.7 million yuan, for total penalties worth more than 180 million yuan.

Senior executives at all three banks have also incurred penalties of between 50,000 to 100,000 yuan for regulatory infractions.

According to National Business Daily the banks incurred fines for a broad range of regulatory infractions, including the extension of loans to affiliated parties, the charging of services fees without the provision of actual services; the charging of services fees in excess of the service price catalogue, as well as the provision of principal guarantees for interbank wealth management products.

The administrative decisions concerning China Merchants Bank and SPD Bank were both made in February, just prior to the amalgamation of the China Banking Regulatory Commission and the China Insurance Regulatory Commission.

The administrative decision concerning Industrial Bank was issued in April, just following the formation of CBIRC.

China Merchants Bank was implicated in a total of 14 breaches, including severe breach of macro-prudential management regulations, the illicit wholesale transfer of non-performing loans for which a single individual is the underlying borrower, as well as the acceptance of third party financial institution credit guarantees for interbank investment operations.

SPD Bank was involved in a  total of 19 breaches, including severe breach of macro-prudential management regulations, false increases in standard deposits via the use of asset management plans to invest in branch agreement deposits; severe negligence in loan management leading to a large volume of non-performing loans, and the provision of loans to affiliated parties.

Industrial Bank was involved in a total of 12 breaches, including major affiliate transactions that were not  reported to regulatory authorities or conducted in accordance with stipulated inspections and approvals, the handling of interbank business without credit quotas or in excess of credit quotas, the appointment of directors whose qualifications had not been approved, and the provision of financing to real estate projects that lacked proper documentation.