Produced by |WEMONEY LABORATORY
Text: Wang Yanqiang
Recently, the stock market has shown a significant upward trend under the stimulus of multiple favorable policies, with A-shares and H-shares performing well, and investor confidence has increased significantly. However, under this prosperous scene, the regulatory authorities have not relaxed the maintenance of the order of the financial market, especially the stricter regulatory requirements for strictly prohibiting bank credit funds from entering the stock market in violation of regulations.
A chart of the recent stock price of the Shanghai Composite Index
According to the Financial Times, the financial management department has issued window guidance to commercial banks, requiring financial institutions to attach great importance to investor suitability management and investor protection, strengthen internal control and compliance management, and strictly control leverage. Insiders stressed that bank credit funds are strictly prohibited from entering the stock market in violation of regulations, and this is a red line of financial supervision that commercial banks must adhere to.
ACCORDING TO THE WEMONEY RESEARCH OFFICE, IN THE FIRST THREE QUARTERS OF 2024, THE STATE FINANCIAL SUPERVISION AND ADMINISTRATION ISSUED A TOTAL OF 1,533 FINES TO THE BANKING INDUSTRY, WITH A TOTAL AMOUNT OF 1.181 BILLION YUAN IN FINES AND CONFISCATIONS. Among them, the loan business is still the "hardest hit area", and its violations of laws and regulations include inadequate post-loan management, misappropriation of working capital loans, and illegal inflow of credit funds into real estate and stock markets.
For example, on January 9, the administrative penalty decision of the Zhejiang Supervision Bureau of the State Administration of Financial Supervision showed that the Zhejiang Branch of the Postal Savings Bank failed to discover the cancellation of business entities in a timely manner due to the imprudent management of personal operating loans; granting personal business loans to civil servants; misappropriation of personal loan funds into the stock market in violation of regulations; misappropriation of personal loan funds into the housing market in violation of regulations; The "three checks" of loans are not in place, and the disclosure of major negative information is insufficient; working capital loans are diverted into the stock market; The working capital loan was misappropriated for trusts and other investments and other 18 violations of laws and regulations, and was fined 6.45 million yuan.
At the same time, Bao Jie, then deputy general manager of the Zhejiang Branch/Consumer Credit Department of the Bank's Sannong Finance Division, was warned.
Image source: State Administration of Financial Supervision and Administration
On February 1, the administrative penalty information disclosure table of the Wenzhou Supervision Branch of the State Administration of Financial Supervision and Administration showed that the Wenzhou Branch of the Agricultural Bank of China flowed into the real estate market due to the illegal flow of personal operating loan funds; The mortgage loan funds have not been transferred to the pre-sale fund supervision account and effective measures have not been taken to ensure the safety of the funds; Issuing loans to projects with unpaid capital in violation of regulations; Illegal inflow of personal credit funds into the stock market; Nine violations, including the illegal custody of documents signed by customers but blank key elements, were fined 3.3 million yuan.
At the same time, Xu Xiaofei, then deputy general manager of the personal finance department of the Wenzhou branch of the Agricultural Bank of China, Zhang Lin, then vice president of the Ruian branch of the Agricultural Bank of China, and Lin Cong, then vice president of the Pingyang County branch of the Agricultural Bank of China, were given warnings.
Image source: State Administration of Financial Supervision and Administration
In addition, on July 5, the State Administration of Financial Supervision and Administration Shanghai Supervision Bureau Administrative Penalty Information Disclosure Table showed that Shanghai Fengxian Pufa Village Bank was fined 950,000 yuan for four violations of laws and regulations, including inadequate post-loan management of personal consumption loans and illegal flow of loan funds into the stock market.
On July 8, the administrative penalty information disclosure form of the Quzhou Supervision Branch of the State Administration of Financial Supervision and Administration showed that Zhejiang Longyou Rural Commercial Bank was fined 3.95 million yuan because the "three checks" of the loan were not in place, the actual use was inconsistent with the contract, and some credit funds flowed into restricted areas in violation of regulations.
On July 9, the Shanghai Supervision Bureau of the State Administration of Financial Supervision and Administration issued an administrative penalty information disclosure form, showing that
Shanghai Jiading Minsheng Village Bank was fined 1.4 million yuan for four violations of laws and regulations, including the illegal flow of personal loan funds into the stock market, the illegal flow of working capital loan funds into the stock market, the serious imprudent management of working capital loans, and the serious violation of prudential business rules in the management of employee behavior.
On August 16, the administrative penalty information disclosure table of the Zhejiang Supervision Bureau of the State Administration of Financial Supervision showed that Xiaoshan Rural Commercial Bank was not prudent in loan management, and the funds flowed back as a deposit for bank acceptance bills; The management of working capital loans was not prudent, and the funds were diverted to the stock market; The management of personal operating loans is not prudent, and funds flow into the stock market in violation of regulations; Failure to reasonably share the premiums of mortgage property insurance for small and micro enterprises; The interbank loan business was fined 4.5 million yuan for violations of laws and regulations such as defects in the internal control management of the interbank loan business.
Image source: State Administration of Financial Supervision and Administration
Previously, on December 29, 2023, the Shanghai Supervision Bureau of the State Administration of Financial Supervision issued a fine showing that Bank of Shanghai was fined a total of 1.45 million yuan for four issues, including 150,000 yuan for the head office and 1.3 million yuan for the branch, for four issues, including the illegal flow of personal consumption loans into the stock market and the serious violation of prudential business rules in the pre-loan investigation of personal loans.
At the same time, Zhou Le, then president of the Xuhui branch of the Bank of Shanghai, was warned and fined 50,000 yuan for being seriously imprudent in the management of working capital loans provided by the factoring business of the branch, and for illegally using the entrusted loans for the purchase of wealth management.
In fact, according to the incomplete combing of the WEMONEY research laboratory according to the Flush iFinD data, since 2023, among all bank fines, there have been nearly 20 fines involving "inflow into the stock market".
Strictly prohibiting bank credit funds from entering the stock market in violation of regulations means that banks have strengthened their responsibilities for risk management and compliance operations, and helped to maintain the safety and soundness of bank assets. For individuals, borrowing money to speculate in stocks is extremely risky, because once the investment fails, not only will they face the loss of principal, but also need to bear high loan interest and repayment pressure, which may lead to a serious deterioration of their financial situation and even a debt crisis.