The Agricultural Bank of China, one of the country's largest
lenders, allegedly granted 26.6 billion (US$ 26, 660 million) in loans
against banking laws and regulations in 2004 according to the China Audit Bureau
in an audit circular on its website, reports chinanews.com on June 26.
"Business crime is still rampant inside the bank, which
has seen 51 criminal incidents, with 8.86 billion yuan and 157 personnel
involved," the circular says, adding that "the loans were for sedan purchases, real estate and poverty relief, " says
the circular.
Banking reform is on the Chinese government's agenda after its entry into the
WTO in 2001, which enabled the country's state-owned banks to compete with
overseas banks.
"The bank has some problems with operation management and crisis control. It
needs to better improve its business, " says the circular.
The result came after China's auditing body released its audit result on the
bank's assets for 2004.
"The bank absorbed 14. 2 billion yuan (US$1,420 million) against its regulations and at some
branches customer's deposits were even used for other purposes," says the
circular.
"It is not only people outside the bank who are involved but also insiders."
Education loans were also placed on the blacklist after the audit found some
payback rates were dependent on the schools' or students' economic status.
The circular also states that 75 million yuan (US$94 million) has been lost
after a staff member in a Sichuan branch embezzled 118 million yuan (US$15
million) for purchasing shares.
The audit also found 1.267 billion yuan (US$1, 250 million) was illegally
used, of which 1. 182 billion yuan (US$1,182 million) was miscalculated and 849
million yuan (US$109 million) was embezzled by the bank."
Fraud, money laundering and embezzlement have made headlines in China
recently.
About 1,697 staff members of financial organizations have been seized for
bank crime in the first half of 2005, according to previous state media reports.
