(Yicai Global) Aug. 14 -- Amid an unprecedented regulatory crackdown on illegal activities in the banking sector, Citibank China and other four banks have recently received financial penalties by the local Shanghai branch of China's regulator due to non-compliant business practices.
The Shanghai branch of China Banking Regulatory Commission (CBRC) imposed fines totaling USD2.05 million (CNY14 million) on Citibank (China) Co., Bank of Shanghai Co. [SHA:601229], Hua Xia Bank Co. [SHA:600015], Bank of Tianjin Co. and Agricultural Bank of China Co. [SHA:601288], Jiemian News reported on Aug. 12.
Due to violations of mortgage interest rate regulations and ineffective rectification of non-compliant credit card operations, Citi China was fined USD1.56 million (CNY10.64 million), the heaviest fine ever imposed on a commercial bank.
Market insiders believe the decision will set a new 'benchmark' for similar cases in the city. If regulators stick to this approach, the banking industry will see a significant number of hefty fines in future, they predict.
The other four banks were punished for illegal bridge loan operations (Agricultural Bank of China), illegal discounts (Hua Xia Bank), illegal contracts for commercial paper repurchase (Bank of Tianjin) and failure to verify funding for consignment products (Bank of Shanghai).
The CBRC has issued seven documents directly targeting illegal banking practices this year. Data show the commission and its local branches and offices have imposed 1,608 fines so far this year, indicating that banking market regulation has reached an unprecedented scale.