Several Chinese banking, insurance and credit institutions have been criticized for charging excessive fees on loans to small and micro businesses, involving a total of nearly 100 million yuan ($15.24 million) in violations, said the country's banking and insurance regulator Saturday.
Targeted inspections by the General Office of the State Council and China Banking and Insurance Regulatory Commission (CBIRC) found that some branches of Industrial and Commercial Bank of China and China Minsheng Bank had charged fees that should have been abolished for loan issuance to small and micro businesses.
An inclusive financing company under Ping An Insurance (Group) Company of China Ltd. and Industrial Bank Co., Ltd. bundled insurance sales when extending loans to businesses to charge high service fees, according to a statement by the regulator.
The CBIRC urged financial institutions to enhance support for businesses to help firms get over difficulties, and not to attach unreasonable conditions.
The regulator vowed to act against practices that flout regulation.
It is necessary to effectively safeguard companies' rights to know, to make independent choices and conduct fair transactions. Banking and insurance institutions should not use market advantage to attach unreasonable conditions, force bundling sales and illegal charges, which will increase the hidden financing costs of small and micro enterprises.
They should strengthen corporate governance, implement the main responsibility for the management of branches or subsidiaries, and strengthen the management of cooperation with third-party institutions, said the regulator.
(With input from Xinhua)