Eight banks and 18 individuals will be fined by the China Banking Regulatory Commission (CBRC) for issuing loans that two state-owned firms used to invest in the stock market, a move strictly prohibited by the government, the Wall Street Journal reported. The action follows CBRC investigations launched this year on tips that China Nuclear Engineering & Construction (Group) Corp and China Shipping (Group) Co, which had diverted bank loans into improper investments. The eight banks fined include Bank of China, Industrial and Commerical Bank of China, Bank of Communications, China Merchants Bank, China Citic Bank, Industrial Bank, Shenzhen Development Bank and Bank of Beijing. The fines are believed to be a warning to banks to conduct due diligence checks on state firms trying to circumvent rules forbidding them to speculate on shares.
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