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BIZCHINA / News |
Watchdog tackles bank fraudBy Mao Lijun (China Daily)
Updated: 2007-08-03 08:39 The country's banks reduced crime and irregularities in the first half of the year by 62 percent from a year earlier through improved management and controls, the China Banking Regulatory Commission (CBRC) said yesterday. The banking watchdog discovered 193 cases of bank fraud and other irregularities in the first half, 293 fewer cases than the same time last year, with 51 cases involving at least 1 million yuan. Another 76 cases involving more than 1 million yuan were stopped by banks' internal auditing, preventing losses of 1.14 billion yuan, the CBRC said. Most irregularities occurred at banks' low-level organizations, with misused funds directed toward stock investment, lottery tickets and startup companies, the regulator said. Most cases involved local branch managers, who colluded with other bank staff and outsiders to take advantage of loopholes in the management system. A total of 1,132 individuals were involved in bank fraud and irregularities in the year's first half, with 442 management-level bank staff and 50 high-level managers. "The CBRC will improve management and tighten controls on banking fraud and irregularities with a long-term effective mechanism," Hao Aiqun, deputy director of the banking supervision department with the CBRC, said at a news conference in Beijing yesterday. Probes in the second half will focus on the Agricultural Bank of China and rural cooperative unions, the CBRC said. Hao said most banking irregularities should be stopped at the earliest possible stage through internal auditing and the execution of other relevant regulations. The CBRC aims to reduce the number of irregularities by 20 percent in 2007, while reducing fraud cases involving more than 1 million yuan by 20 percent this year. The regulator urges banks to set up monitoring system to uncover crimes. It also suggests domestic banks to improve their risk-management systems and corporate governance. Bank of China, China Merchants Bank, and Bank of Communications were discovered approving real estate loans and mortgages worth 5.1 billion yuan based on fake documents. The regulator plans to take more measures including setting up an orderly system and expanding investigations in an effort to reduce irregularities.
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