BreakingChina fines Citibank, four others for breaching mortgage and credit card rules
Fine is largest ever issued by Shanghai office of the China Banking Regulatory Commission, according to mainland media reports; four other local banks also penalised
Citigroup and four other Chinese banks have been fined a combined 14 million yuan (US$2.1 million) by China’s banking regulator in Shanghai for breaching mortgage and credit card rules, in an unprecedented crackdown by the authorities to rein in runaway credit.
Citi received the largest fine of 10 million yuan, and was accused of violating mortgage lending rules and for showing insufficient care when issuing credit cards to customers, according to an August 11 notice on the website of the China Banking Regulatory Commission (CBRC).
The breaches took place in the first 10 months of 2015, the regulator said.
The four Chinese banks that were fined were Hua Xia Bank (2.06 million yuan), Bank of Tianjin (500, 000 yuan), Bank of Shanghai (500,000 yuan), and the Agricultural Bank of China (nearly 600,000 yuan).
“The regulator’s fine on Citibank for lending and credit card irregularities extends Beijing’s recent campaign against financial risk to domestic commercial and consumer lenders,” said Brock Silvers, managing director of Kaiyuan Capital. “Despite being the largest commercial bank fine to date, the sanction isn’t significantly impactful, and could indicate a desire to be even-handed rather than presaging a broader movement against the banking sector.”
The penalties reflect the increasing scrutiny placed on China’s banking industry, as the regulator stepped up its effort to repair any weak links and avert potential risks in the financial system amid a slowing economy. On a larger scale, the bank regulator had joined with watchdog agencies in securities, insurance and with the central bank to deter outsize acquisitions, force companies to pare down debt, and slow capital remittances.