China Banking and Insurance Regulatory Commission Photo: VCG

China Banking and Insurance Regulatory Commission (CBIRC) issued a notice on Friday regarding the fines issued to five financial institutions for market violations of laws and regulations, as part of the government's measures to safeguard the legitimate rights and interests of financial consumers while firmly holding the bottom line of preventing systemic financial risks.

Five financial institutions - China Construction Bank (CCB), China Minsheng Bank, Standard Chartered Bank (China), Bank of China and China Bohai Bank - were fined 388 million yuan ($56.5 million) in total, in light of the decision announced on Thursday.

During the special on-site inspection of the financial institutions, part of a drive to support the implementation of major policies for private enterprises and small and micro enterprises, the above-mentioned institutions were found to engage in illegal and non-compliant activities, such as diversion of loan funds, falsification of statistical data, and non-standard review procedures for major transactions, according to the notice.

Specifically, CCB was fined a total of 199 million yuan for 38 major violations of laws and regulations, comprising 73.415 million yuan for the CCB head office and 125.5 million yuan for its branches. The 38 violations involve not only corporate governance issues, but also various business issues such as personal loans and financial services.

China Minsheng Bank was fined 89.724 million yuan in total, followed by Standard Chartered Bank (China)'s 49.659 million yuan and Bank of China's 32.8 million yuan. Bohai Bank received a fine of 16.6 million yuan.

It has been rare in recent years to be fined such large amounts and for such a large number of reasons, chnfund.com reported on Friday.

To better safeguard the legitimate rights and interests of financial consumers, CBIRC said that the administrative penalties will be strictly enforced in accordance with the law, and market discipline and order will be further regulated.

Banking and insurance institutions are also urged to operate in compliance with regulations and develop steadily to ensure financial services serve the real economy, while firmly holding the bottom line of allowing no systemic financial risks.

The latest move is part of the Chinese banking and insurance regulator's continuing efforts to regulate market order to ensure the sustainable and healthy development of the industry.

In 2022, 4,620 banking and insurance institutions and 7,561 people were punished, and 2.899 billion yuan was confiscated, according to CBIRC on January 13.

The government's efforts to further strengthen market regulation have achieved remarkable results, especially in terms of improving the quality and efficiency of financial services for the real economy.

For example, in 2022, loans of Chinese yuan increased by 21.3 trillion yuan, the balance of insurance funds rose by 9 percent, and new bond investments of banking and insurance institutions exceeded 11 trillion yuan.

Global Times