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240 corruption cases uncovered in banks
Updated: 2005-10-24 10:57

China uncovered 240 cases of corruption in its state-owned commercial banks in the first half of the year, with losses totalling 1.6 billion yuan (198 million dollars), state media said.

The Xinhua news agency, citing a State Banking Regulatory Commission official, said the money stolen from commercial banks from January to June amounted to about half of the country's total sum lost to bank embezzlement.

About 25 percent of the cases involved more than 1 million yuan (123,500 dollars) each, Xinhua said.

Shen Xiaoming, deputy director of the commission's supervision department, attributed the large number of scandals to bank reforms and improved government efforts to crack down on financial crimes.

The past year has seen an increase in the number of arrests and trials on corruption charges of bank officials, from branch managers to the vice chairman of the state-run Bank of China in Hong Kong.

But the report revealed that graft remains a serious problem in China, even as the government pushes forward with reforms in hopes of getting the top banks listed overseas and improving overall management of the system.

China has 189 banks and more than 30,000 credit cooperatives with total assets amounting to 30 trillion yuan (3.7 trillion dollars).

The big four state-owned commercial banks --the China Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China and Bank of China -- have a combined market share of 55 percent.

In an interview published by Economic Information Daily Saturday, Shen said China would soon strip governors of state-run commercial banks of their power to approve loans, in a bid to prevent corruption.

The power of top managers, approving loans without questions, is blamed for contributing to the large amount of non-performing loans in the banking system.

Shen said the government wants to reduce the managers' authority to the equivalent of a university president.

"Their future job is only in charge of administrative affairs, local marketing and business expansion," Shen was quoted saying.

Shen said China's banks in future would adopt the practice of foreign banks and make decisions collectively.

Some Chinese state-owned commercial banks have already set up a loan-approval committee and bank governors are no longer allowed to directly take part in the loan approval process, Shen said.

China's 2004 state audit report uncovered 9.06 billion yuan (1.1 billion dollars) in misappropriated funds at central government departments and 14.5 billion yuan in such funds by top state companies, prompting the state-run media to question the government's resolve in fighting corruption.

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