(Yicai) Jan. 5 -- Three Chinese commercial banks have received the first warnings and penalties from the country’s financial watchdog of this year for violating credit issuance regulations.

The National Administration of Financial Regulation fined Dujiangyan Jindu County Bank CNY4.5 million (USD629,540) for violating rules when providing funds to real estate developers, issuing loans to supplement working capital that instead consumers used for fixed asset investments, and other factors, the regulator announced on Jan. 2. Moreover, the lender’s president and vice president at the time of the violation received personal warnings and financial penalties.

A sub-branch of China Merchants Bank in Ganzhou, a prefecture-level city in eastern Jiangxi province, received penalties from the NAFR for loose review on the use of loans and loose management of loan payments. The Ganzhou branch of regional lender Bank of Jiujiang was penalized for inadequate due diligence of probes and reviews before and during the loan issuance.

Credit rule violations are the major reasons for lenders to receive regulatory fines. Among the 2,415 penalties the NAFR imposed on banking institutions last year, nearly half were due to the violation of credit issuance regulations, according to iFinD, the data terminal of Hithink RoyalFlush Information Network. Many of them were huge-value tickets for violations during the issuance of loans to the real estate sector.

Last month, China Citic Bank and its branches received fines worth a total of around CNY224 million (USD31.3 million), with 19 of the 56 rule-violating acts being related to credit grating or loans.

Credit will remain the regulatory focus in the future, Yicai learned from a source close to the NAFR. Banking institutions still have to strictly obey various rules when issuing loans, even though the regulator encouraged them to equally satisfy the reasonable fundraising needs of public and private property developers, the source added.

Editors: Tang Shihua, Futura Costaglione