, China

Chinese banks ordered to do internal scrutiny within 15 days

China government issued "internal and extra urgent" notice last Friday.

Banks have been ordered to perform internal checks of branches and employees as the China Banking Regulatory Commission bids to prevent unauthorized sales of third-party financial products after a Beijing-based lender failed to repay investors.

The CBRC issued an "internal and extra urgent" notice last Friday that requires the banks to complete an internal check within 15 days of branch staff, especially frontline personnel such as client managers and sales managers selling wealth management products.

The notice stipulates that the banks should, for example, scrutinize documentation and monitor telephone recording randomly to ascertain if employees make arbitrary recommendations or unauthorized sales of products distributed by third parties.

The headquarters of the banks should order branches to perform the internal checks within seven days after the notice date, and consolidate the reports within 15 days, the CBRC said. The regulator will then make its own public and private checks randomly after 30 days.

Earlier this month, Hua Xia Bank blamed an employee at a Shanghai branch for selling a wealth-management product without permission, after media reported the product could not repay investors. Both the police and CBRC Shanghai office are investigating the matter.

Banks' profits face pressure from narrower interest rate margins amid liberal interest rates, the Bank of Communications said in a note yesterday.

Read more here.


 

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