China regulator revises internal control guidelines for banks

The mainland's banking regulator has issued revised internal control guidelines for banks to ensure that appropriate risk management controls are adopted, while increasing penalties for any violations, the regulator said yesterday.

The China Banking Regulatory Commission said in a notice published on its website that guidelines first published in 2002 needed to be updated to take into account changes at Chinese commercial banks.

"The organisational structure and business operations at China's commercial banks have undergone a relatively big change," the CBRC said in its statement.

"The risks they face are increasingly diverse and internal controls are becoming increasingly important."

The new internal control guidelines cover areas ranging from senior management and board director processes and methods, to internal control responsibilities of audit departments and business units.

Issuance of the guidelines comes days after the People's Bank of China began a targeted programme to make available 500 billion yuan (HK$631 billion) in short-term funds to the five biggest banks.