BEIJING - China's banking regulator said Saturday it had fined 12 banks a total of 295 million yuan ($46.2 million) over a bill fraud case in the northwestern province of Gansu.

Investigations of a Postal Savings Bank of China (PSBC) sub-branch in the Wuwei city of Gansu in December found 7.9 billion yuan worth of bills involved in the fraud, according to the China Banking Regulatory Commission (CBRC).

Another 3 billion yuan of wealth management funds were illegally drawn or embezzled in this case, the CBRC said.

"Bank staff colluded with outsiders to carve official seals without permission, used fake papers and contracts, illicitly conducted inter-bank wealth management business and bill discounting, and illegally drew and embezzled funds," a CBRC statement said.

It was a severe case involving multiple agencies and seriously damaged market order, according to the statement.

The former head of the PSBC sub-branch was barred from banking for life and transferred to judicial agencies. Executives at the bank's city-level and provincial branches, as well as those from the other 11 banks involved in the case, were also punished.