What’s new: Regulators fined Bank of Shanghai Co. Ltd. 98.5 million yuan ($14.3 million) for violations in foreign exchange transactions.
The commercial bank allowed unauthorized branch offices to conduct foreign exchange transactions illegally, the Shanghai office of China’s State Administration of Foreign Exchange (SAFE) said in a statement. The bank branches weren’t qualified to make foreign exchange transactions or had been ordered to cease operations, SAFE said.
Authorities also confiscated illegal gains of 199,000 yuan, and three officials responsible for the violations were fined 70,000 yuan each, the regulator said.
The background: Bank of Shanghai has been repeatedly punished by regulators. In February 2022, the Shanghai Banking and Insurance Regulatory Bureau and the Shenzhen Banking and Insurance Regulatory Bureau fined it for violating regulations in accepting guarantees from third-party financial institutions for interbank investments and for lack of due diligence in its loan reviews that resulted in misappropriation of funds by borrowers.
SAFE said the bank violated regulations by selling foreign currency wealth management products to overseas individuals, conducting interbank foreign exchange market transactions using unauthorized communication tools, failing to keep required records of transactions and inflating transaction volumes.
Bank of Shanghai also violated regulations on overseas loans under domestic guarantees and failed to fully review borrowers and supervise their use of funds, the regulator said.
The transactions involved in the penalties occurred between 2019 and 2021, the bank said April 28, and the penalties will have no significant adverse impact on the bank's business and continued operations.
The bank’s financial performance has been disappointing as revenue shrank in 2022 and in the first quarter of 2023.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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