Chinese small bank finds inappropriate financing and governance issues-Reuters News-International

[Beijing 30th Reuters]-China Bank Insurance Regulatory Commission (CBIRC) revealed on March 30 that a number of violations of the rules were discovered as a result of a series of surveys targeting small and medium-sized banks.

CBIRC pointed out that some financial institutions illegally financed real estate businesses with insufficient capital, local government agencies with excess debt, and companies that did not comply with environmental regulations.

Small banks are losing their main income sources due to the introduction of new asset management regulations, and their management is deteriorating as bad loans expand.

CBIRC also pointed out several issues related to corporate governance, such as the absence of long-term executives and the lack of an evaluation system for management.

In addition, he stated that he often did not meet the standards for risk management and internal management, and that some banks had found counterfeited signatures and seals.

All local small and medium-sized banks pointed out that internal control should be strengthened to prevent legal loopholes and focus on improving the system.