Authorities punish banks for breach of deposit rules

• Source: Global Times
• [09:26 September 08 2010]
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By Zhou Mi

A bank in Shanghai has been fined 540,000 yuan ($79,560) for contravening a notice issued by the Shanghai Banking Association, which banned the use of "abnormal means" to solicit deposits from customers.

The fine was issued to the Shanghai headquarters of an unidentified bank by the Shanghai branch of the banking industry watchdog, China Banking Regulatory Commission, the latter announced on Monday.

In the same statement, the commission said another bank has had the opening of a new branch in the city delayed and been temporarily banned from accepting deposits from non-banking financial institutions for breaching the same notice.

In neither case was a specific reason for censure given.

Shanghai Banking Association issued a notice to banks in the city last month, calling for them to end the solicitation of deposits by "abnormal means," including the giving of gifts or cash bonuses to depositors, offering interest rates above the benchmark rate, requiring deposits from loan applicants and exempting depositors from commission charges.