Teams of major commercial banks promote financial support: CPC top disciplinary agency

A branch of the Industrial and Commercial Bank of China. File photo: Xinhua

The main disciplinary agency of the Communist Party of China (CCP) has sent teams to major Chinese commercial banks on a mission to ensure that the Party’s central committee’s financial support policies for the economy are fully implemented, according to a statement published Thursday on the website of the Central Commission for China. Discipline Inspection (CCDI).

Teams of disciplinary officers dispatched to China’s major commercial banks, from the Industrial and Commercial Bank of China (ICBC) to the Bank of Communications, have played a role in encouraging banks to provide financial support to the real economy and to ensure the Party’s policy of strengthening the economy takes its intended effect, according to the statement.

Experts said the role of disciplinary officials served to foster implementation, without which support policies would become empty words as the country’s new yuan lending slowed markedly in April.

In April, hit by the nationwide outbreaks of Omicron, new yuan loans reached 645.4 billion yuan ($95.12 billion), down sharply from 3.13 trillion yuan in March, according to central bank data as of mid-May.

At ICBC, disciplinary officials focus and monitor how the bank serves the manufacturing sector by setting up a policy inspection book of accounts.

At the request of inspectors, ICBC’s outstanding loans to the manufacturing sector increased by 403.5 billion yuan to 2.57 trillion yuan from January to April. The net increase in lending quadrupled the amount of increase recorded over the same period in 2021.

Ensuring the proper development of the real economy is a political and social responsibility of public financial institutions, the statement said, citing an ICBC-based disciplinary official.

At China Construction Bank, disciplinary officials urged the commercial and administrative sections of the bank to implement central government policies to support small and medium enterprises and open green passageways on the review and approval pipeline loans for key businesses to get loans sooner.

At the Agricultural Bank of China, disciplinary officials tracked and monitored project lending data under the rural revitalization initiative, and reminded bank executives when a contraction in credit extension is observed. They also focused on anti-corruption work in the financial sector, a much-needed measure to help stem financial risks. In the first quarter, ABC extended more than 1 trillion yuan in credit to the real economy, and its lending growth to key rural revitalization sectors exceeded average lending growth.

Two bank executives at two bank branches in Heilongjiang, northeast China, have been penalized for making fake rural loans.

At the Bank of Communications, disciplinary officials encouraged the bank’s management to review and update its regulations on liability for non-performing assets.

In a campaign to crack down on corruption in the financial sector, disciplinary inspectors sanctioned 10 Bank of China bank employees for illegally granting bank loans in mid-May after reviewing 419 projects.

State-owned commercial banks represent the bulk of credit organizations in China. The top five banks – ICBC, CBC, ABC, BOC, BOCOM – accounted for more than half of all loans made.

Experts said China’s economy is facing unexpected difficulties after the first quarter after Omicron outbreaks cripple megacities including Shanghai and Beijing, credit lending by state-owned commercial banks to needy businesses, especially the smaller ones, is a key aspect of the overall battle. to combat the economic impact of the epidemic.

State-owned commercial banks have an obligation to support the national policy of strengthening the economy, Dong Dengxin, director of the Institute of Finance and Securities at Wuhan University of Science and Technology, told the Global Times on Thursday. .

This is something Western governments could not ask their banks to do because their banks are private and purely profit-oriented, Dong said.

Disciplinary inspectors play a necessary role in influencing bank management to implement state policies and extend credit, reversing an “understandable” tendency for banks to be unwilling to lend in order to avoid losses at this critical juncture, Dong said.

The Chinese government has stressed the need to step up support in key areas such as epidemic-hit businesses, micro and small business owners, and sole proprietorships. The People’s Bank of China, the central bank, announced 23 measures to provide financial services for socio-economic development and coronavirus prevention and control in April, cut the reserve requirement ratio to increase capital supply term for domestic financial institutions and lowered interest rates.

The increased presence of disciplinary inspectors also means that data released by banks on credit extensions is more transparent and credible, as the disciplinary watchdog has increased oversight of the entire process.

Years ago, state-owned commercial banks performed similar roles when rescuing state-owned companies in poor financial shape.

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