China's banking watchdog on Monday said it had punished branches of eight banks in Shanghai and Beijing after finding their poor supervision had allowed two major state firms to misuse loans totalling 4.46 billion yuan (585 million dollars). The Shanghai branches of six banks failed to prevent the China Shipping Group from using 2.4 billion yuan (315 million dollars) for stock-market investments after lending it a total of 2.7 billion yuan, dpa quoted the China Banking Regulatory Commission (CBRC) as saying in a statement. The CBRC named the Shanghai branches of China Merchants Bank, the Industrial and Commercial Bank of China, China CITIC Bank, the Bank of China, China Industrial Bank and Shenzhen Development Bank. The China Nuclear Engineering and Construction Corporation (CNECC) illegally used about 2.06 billion yuan (270 million dollars) of its 2.4 billion yuan loans to finance real estate businesses and stock-market investments, the regulator said. The Bank of Beijing and the Beijing branch of Bank of Communications had granted the loans to CNECC, it said. The punishments for the eight banks include fines of up to 1.7 million yuan (223,000 dollars), suspension of loan operations, and cancellation of the qualifications of some senior banking officials involved in the loans. The State Assets Regulatory Commission is considering further action against the two state firms, the banking regulator said.
