China’s Banking Regulator Issues 40 Million Yuan in Fines to Lenders in May


The China Banking and Insurance Regulatory Commission (CBIRC) has stepped up scrutiny of malfeasance in the banking sector, issuing at least 40 million yuan (approx. USD$5.64 million) in penalties to lenders in the month of May alone.

Figures from Beijing Business Today indicate that CBIRC issued 113 fines to banking sector institutions and professionals in May, worth 43.21 million yuan in total.

These penalties hit lenders across all categories including state-owned banks, joint-stock banks, municipal commercial banks, rural commercial banks, rural credit societies and village county banks.

60 penalties worth over 18 million yuan were issued to Chinese banks for failing to properly assess loans, provision of loans in breach of regulations or misappropriation of loan funds.

Eight banks received 17.7 million yuan in fines in relation to the quality of the data they submitted or data omissions.

CBIRC issued 54 fines to individuals, including 39 warnings, six cancellation of senior executive qualifications, and two lifetime bans.

Nine banks received penalties of over one million yuan, including one rural credit society.

Liu Cheng (刘澄), a professor from the financial engineering department of the University of Science and Technology in Beijing, said that the issuance of over one hundred fines by CBIRC in May indicates that the authority will have “zero tolerance” for regulatory breaches, and that irregular behaviour in the Chinese banking sector remains widespread.

Tao Jin (陶金), a senior researcher from Suning Finance, said the fines indicate that CBIRC will continue to focus on existing risk issues, as well as the veracity of data and related risk control.

“Regulation will continue to be strict for areas including leverage, liquidity, pricing, asset quality, lending policies and real-estate involvement.”

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