The Shanghai banking regulator said today it will strengthen checks on bank fraud to rule out irregularities.
Some banks have loosened fraud checks recently and more cases have been detected this year after a smooth 2007, said Yan Qingmin, the head of the Shanghai Bureau of the China Banking Regulatory Commission, yesterday in a statement.
Banks in Shanghai performed well in curbing fraud last year with no cases involving more than 1 million yuan were discovered. However, challenges still loom, Yan said.
Some banks see the checks as stage work and not a long-term mission while some lenders failed to follow existing internal risk controls, the regular said without naming the banks.
Many fraud cases have been unearthed, proving that some lenders don't have effective management of frontier outlets.
Yan said that most internal checks are not effective and that most fraud cases are uncovered by outside sources.
Punishment needs to be strengthened with people directly involved in fraud cases and senior-level banking managers taking responsibility, Yan added.
A reward system should also be advocated in banks to encourage people to disclose fraud cases.
He said the banking regulator will strengthen its supervision of bank fraud prevention work in the second half. This includes disclosing fraud cases and the bankers who are involved, said Yan.
(Shanghai Daily June 19, 2008)
