No easy offers to lure money
By Zhang Fengming |
March 17, 2011, Thursday
|
Print Edition
Print Edition
BANKS in Shanghai will face "harsh" punishment if they offer gold bars, shopping cards or cash to draw customers to deposit money with them, according to the city's banking regulator.
Lenders are now banned from offering such gifts or raising deposit rates to entice customers to open savings accounts, the Shanghai Bureau of the China Banking Regulatory Commission said yesterday.
They are also banned from waiving commissions on other services to attract such deposits, the local banking authority added.
Banks cannot assess their employees' work performance by the volume of deposits they managed to obtain, the regulator said.
Some banks in Shanghai have been known to require individual mortgage clients to buy wealth management products.
The bureau will overhaul the industry to eradicate such practices.
But no details of the punishment were released in the statement.
Banks are under pressure to attract more deposits as China moved to a tighter and prudent monetary policy this year from an accommodative stance. As the central bank aims to slow the growth in money supply, banks need to lure more funds so that they can lend more.
China's money supply and lending slowed in February as a tighter monetary policy bore fruit.
Banks in China extended 535.6 billion yuan (US$82 billion) of new yuan-backed loans in February, compared with January's 1.02 trillion yuan.
M2, the broader measure of money supply, rose 15.7 percent year on year in February, shy of an expected 17 percent increase and also short of the central government's annual target of 16 percent.
New loans totaled 1.57 trillion yuan in the first two months of this year, down from 2.09 trillion yuan in the year-earlier period.
China hasn't disclosed its annual lending target for this year, but economists expect 7.5 trillion yuan in new loans to be granted.
Lenders are now banned from offering such gifts or raising deposit rates to entice customers to open savings accounts, the Shanghai Bureau of the China Banking Regulatory Commission said yesterday.
They are also banned from waiving commissions on other services to attract such deposits, the local banking authority added.
Banks cannot assess their employees' work performance by the volume of deposits they managed to obtain, the regulator said.
Some banks in Shanghai have been known to require individual mortgage clients to buy wealth management products.
The bureau will overhaul the industry to eradicate such practices.
But no details of the punishment were released in the statement.
Banks are under pressure to attract more deposits as China moved to a tighter and prudent monetary policy this year from an accommodative stance. As the central bank aims to slow the growth in money supply, banks need to lure more funds so that they can lend more.
China's money supply and lending slowed in February as a tighter monetary policy bore fruit.
Banks in China extended 535.6 billion yuan (US$82 billion) of new yuan-backed loans in February, compared with January's 1.02 trillion yuan.
M2, the broader measure of money supply, rose 15.7 percent year on year in February, shy of an expected 17 percent increase and also short of the central government's annual target of 16 percent.
New loans totaled 1.57 trillion yuan in the first two months of this year, down from 2.09 trillion yuan in the year-earlier period.
China hasn't disclosed its annual lending target for this year, but economists expect 7.5 trillion yuan in new loans to be granted.
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