Chinese banks ordered to tighten third-party sale checks

19 December 2012

Banks in China will have to abide by stricter rules when selling third-party financial products, it has emerged.

According to the Southern Daily Metropolis today (19 December), the China Banking Regulatory Commission (CRBC) has issued new guidance to lenders across the world's second-largest economy concerning their checks on such transactions, Reuters reports.

The regulatory authority has instructed banks to begin scrutinizing their sale of products such as trusts, investment funds and insurance more closely during the final weeks of 2012.

Internal investigations concerning these practices must be completed over the course of the next 15 days and the CBRC also plans to carry out random checks on banks to make sure these instructions have been followed.

However, sales of companies' own wealth management funds will not be affected by this change.

"If bank branches find rule-breaking behaviour and major risks, they must report to their headquarters immediately and work with cooperative institutions to take effective measures to resolve risks," the CBRC noted.

By Tony Aynsley

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development