A new round in China's campaign against market wrongdoing in the financial sector is unfolding, with the Chengdu branch of the Shanghai Pudong Development Bank (SPD Bank) being the latest to be penalized for illegal loans.
The China Banking Regulatory Commission (CBRC) announced that the Chengdu branch of SPD Bank will be fined 461.75 million yuan ($72.16 million) due to illegally providing and covering up non-performing loans, according to a statement released on January 19.
The statement said that the Chengdu branch of SPD Bank provided credit lines worth 77.5 billion yuan to 1,493 shell companies through falsifying loan purposes, spin-off credit granting and other approaches that violated the law in order to cover up bad loans.
"It was premeditated fraud led by the Chengdu branch of SPD Bank involving huge amounts of money," CBRC noted.
The moves resulted in bad assets of almost 10 billion yuan, according to a report published by caixin.com on Saturday, citing people close to the matter.
Wang Bing, the former president of the Chengdu branch, along with four other senior executives, has been barred from working in the Chinese financial industry for life.
In addition, employees in the CBRC bureau in Southwest China's Sichuan Province have been disciplined for supervisory failures.
As of the end of September 2017, the regulator said that the Chengdu branch had basically completed its correction work and was running smoothly.
Chinese financial regulators have been intensifying their efforts in fighting illegal activities in the market, under a broad strategy put forward by top policymakers to fend off financial risks.
