The mainland's central bank yesterday delivered heavy penalties for the heads of eight financial institutions for irregularities, including raising interest rates without official approval. The chiefs of the eight branches and sub-branches were either dismissed, demoted or given a demerit, official media reported. Dai Xianglong, governor of the People's Bank of China, read out the punishments on satellite-linked television and a nationwide telephone conference. He warned those financial irregularities, if unchecked, could lead to a payment crisis in the mainland's banking sector, China Central Television (CCTV) reported yesterday. The high-profile announcements highlighted the urgency by the central bank to strengthen its supervisory role to guard against the financial risk in the wake of the Asian financial crisis. Mr Dai said some of those punished branches or sub-branches required staff to solicit deposits, promising higher interests. The central bank sets fixed interest rates on deposits and bans commercial banks from raising interest rates on their own. He said some also allowed the firms to deposit public funds into personal accounts. The punished financial institutions included a sub-branch of Bank of China in Hubei, a sub-branch of the Industrial and Commercial Bank of China, a sub-branch of the Bank of Communications, a branch of China Investment Bank and a branch of the People's Bank of China. Earlier this year, Mr Dai warned many of the country's smaller banks and financial institutions would be closed down or merged to minimise risk. At the conference yesterday, the central bank also released a set of tough rules on punishments of bank officials who broke regulations. But CCTV did not provide any details.