Leading Chinese Banks Tighten up Precious Metals Transactions for Retail Clients

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Some of China’s leading banks have introduced restrictions on precious metals trading services for retail clients.

Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Huaxia Bank and Industrial Bank Co., Ltd. are amongst multiple banks that have curbed precious metals transactions since the start of the year, according to a report from Securities Journal.

These restrictions include limits on the opening of new accounts, increases in guarantee deposit ratios, as well as suspensions on purchase transactions and the cancellation of agency relationships.

ICBC issued a notice at the start of the month announcing that it would increase guarantee deposit requirements for some transactions starting from 8 July. Starting from 15 August it will also suspend the provision to retail investors of precious metals deferred settlements contracts on the Shanghai Gold Exchange, as well as purchase trades for spot contracts.

Industry insiders say that Chinese banks have made the adjustments at the behest of regulators concerned about recent volatility on the precious metals market and rising instability on international financial markets, as well as the potential impacts on domestic investors.