BEJING: China’s banking regulator has ordered shareholders that have acquired more than 5 per cent stakes in commercial banks through the use of financial products like insurance and asset management schemes to reduce their holdings within a year.
The regulation, dated Feb 2 but made public late on Friday, is the latest in a series of measures to control risk and excessive leverage in the financial system, with everything from doggy lending practices to shadow banking under the microscope.
The regulator also said in a separate online statement that it “strictly forbids shareholders from imposing inappropriate control over banks and seeking illegitimate interests”.
The Beijing-based insurer also held a greater than 13 per cent interest in China Merchants Bank Co through its property and casualty insurance unit during the same period.
The CBRC said it would investigate whether commercial banks’shareholders were using their own, legally obtained funds for investment and whether they were holding stakes for other parties.
