Scandals set off watchdog warnings
Shanghai's banks told to set up complaint hotlines to protect investors after sales of failed wealth products and other irregularities
Shanghai's banking regulator has told lenders to set up telephone hotlines for complaints about staff misconduct in selling wealth management products.
The move is seen as a gesture towards protecting consumer rights after a slew of irregularities in the banking sector.
The Shanghai branch of the China Banking Regulatory Commission (CBRC) and the city's banking association also told customers to report bank employees involved in the underground financing market, another risk highlighted by the CBRC.
The regulator warned banks in Shanghai to "improve risk management" and "find a balance between business expansion and risk prevention", according to bankers attending a CBRC meeting last week.
The demands came after a former employee at a Shanghai branch of Huaxia Bank allegedly promoted an unauthorised wealth management product that later failed.
The default resulted in depositors losing several hundred million yuan. Dozens of investors protested at the bank last month, generating concerns about social stability.
In another scandal reflecting banks' lax management of their branches, Ma Yijiang, former deputy head of a Shanghai Pudong Development Bank branch in Zhengzhou, Henan province, allegedly used 6.4 billion yuan (HK$7.9 billion) in depositors' money to fund loan-sharking schemes in the underground financing market and run other illegal businesses.