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The China Banking Regulatory Commission (CBRC) Sunday issued guidelines for credit extensions among China's commercial banks, specifying responsibilities and prohibitions in their crediting and loaning operations.
The guidelines state that a bank staff who fails to fully investigate the client's credibility, overusing his power or purposely hiding truth, will be punished.
However, if bank staff strictly follows operation process and concerning regulations, he or she could be exempted from responsibilities for problematic credit extension.
The guidelines also prohibit four operations in granting credit and loans, including products and projects that were publicly banned by law, investment in equity capital against regulations, investment in shares, futures against concerning rules and other projects that violate laws.
Credit and loan sector in China's commercial banks has seen all kinds of loan venture cases in recent years, posing great risks to banking industry, said a senior CBRC official.
Moreover, these guidelines were issued as a way to alleviate the risks of credit extension and upgrade the supervision ability over the industry, he added.
(Xinhua News Agency July 26, 2004)
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