China Cracks down on Illegal Banking Practices

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Last updated at: (Beijing Time) Thursday, November 28, 2002

China Cracks down on Illegal Banking Practices

The People's Bank of China (PBOC) issued a circular Thursday ordering banks to stop unfair competition and illegal practices arising from competition.

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The People's Bank of China (PBOC) issued a circular Thursday ordering banks to stop unfair competition and illegal practices arising from competition.

A spokesman for the PBOC said that recently some banking institutions blindly pursued market share increase and engaged in unfair or even illegal competition, which disrupted the normal financial order.

The circular was aimed at regulating competition and protecting the healthy development of the banking industry.

According to the circular, all banking institutions must strictly execute the legal deposit interest rates, and are prohibited from raising interest rates or offering other benefits to depositors. They are also required to abide by the official charging standards for their services.

The central bank asked banking associations to play their role in self-discipline and supervision, and vowed to punish those which broke laws and regulations.

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