Eight employees of Beijing Rural Commercial Bank, the nation's largest regional rural lender, are under investigation in connection with a 460 million yuan (HK$522.37 million) loan fraud case, Caijing magazine reported yesterday. A regulatory taskforce is at the bank examining risk control procedures while police are investigating the eight bank officers, the magazine reported. The scandal is the largest to hit the country's 185 rural lenders, whose reform is stymied by 650 billion yuan of bad loans even after the state bailouts in 2003. The Beijing branch of the China Banking Regulatory Commission will 'pave the way for the improvement of risk control and corporate governance' in the bank by reviewing the existing systems and fixing the loopholes, a regulatory official was quoted as saying. In November, a customer applying for a housing mortgage loan found that someone had used his personal information to acquire a loan from the bank. He reported the irregularity to the banking regulator. In response to the regulator's inquiry, the bank recovered 26million yuan in loans that were extended to Beijing Huading Credit Guarantee. The company was caught using fake certificates and chops by the central bank in February. Later, police found the company was involved in using fake information to acquire loans for its clients and possibly was in collusion with the bank. The eight bank officers being investigated include sub-branch heads and credit managers. Of the 460 million yuan in loans, verified losses to the bank are put at more than 100 million yuan.