China's commercial banks misallocate policy loans

Five Chinese commercial banks were found to have misallocated 58 billion yuan or 8.9 billion U.S. dollars of policy loans.

This was revealed by the head of the National Audit Office, Liu Jiayi.

Liu said that various policy-based financial institutions have been following the country's policies to make their own loan plans and boost operation and risk-prevention abilities but problems still exist in loans and insurance services.

These financial institutions cited include China Life Insurance Company, Property and Casualty Company Limited and the five commercial banks, China Construction Bank, Bank of China, Agricultural Bank of China, the Bank of Communications and the ICBC.

Among the policy loans misused, 25.4 billion yuan was granted to projects that lacked sufficient capital funds or bypassed approval procedures.

Auditing of China Life and PICC's 499 branches revealed that some of these branches used false insurance claims and payments to steal insurance funds that totaled 1.99 billion yuan.

According to Liu, related financial institutions have rectified 18.5 billion yuan involved in illegal management, and another 84.79 million yuan was recovered or collected as taxes.

The full story is availabled at xinhua.