China Construction Bank Curbs Financial Fraud Cases
The Special Campaign of Reducing Law Cases Shows Initial Result

 

In the past more than one month the Shandong Heze branch of China Construction Bank (CCB) successfully curbed 3 financial fraud cases, i.e. banknote replacement fraud, using cheating ways to defraud of customers’ money and swindle bank loans by using fake treasury bond certificate as pledge, involving RMB 20.8 million. It is a miniature of the result of the “Special Campaign of Reducing Law Cases” launched by the bank at the beginning of this year.

A member of the bank’s senior management said that from the beginning of this year to May 31, CCB has successfully curbed 57 financial cases, involving a total amount of RMB 86.31 million. He added that the “Special Campaign of Reducing Law Cases” has helped raise the sense of risk control and the capacity of risk identification and management of employees. The successful curb of a large number of law cases also indicates that some branches and sub-branches are operating in a severe environment and the external risks are fairly serious.

Since the beginning of this year CCB has conducted the special campaign to cut law cases with the focus on strengthening institutional construction throughout the bank so as to realize “four drops” of law cases (i.e. drop of case number, drop of money involved, drop of serious cases and drop of new cases), raise the operational and management performance in accordance with laws and regulations, increase the skills, moral and consciousness of observing laws and regulations of the employees, basically eliminate the problems of continuous violation of rules, establish the sense of following rules and laws, doing business according to procedures and operating in line with laws and regulations, enhance the internal control and risk management and build the capacity of investigating and preventing law cases.

The short-term priority of the “Special Campaign of Reducing Law Cases” is the special examination to prevent violating laws and regulations. The sub-branches of CCB’s provincial branches should take the lead to make self-examination on the implementation of major business rules and regulations including the organizational control, authorization and credit line, credit asset management, capital management, accounting and financial management, computer system management and internal audit. Focus should be put on whether the rules and regulations cover all the departments, business sectors, job positions and operational procedures, whether all the business units have formulated detailed operational processes and rules, whether the rules and regulations are effectively implemented, whether the incidents and problems, if any, are solved effectively and in a timely manner and whether the job position responsibility system is clearly defined and effective and implemented faithfully. Meanwhile, the bank also lists the major root causes of law cases identified in the Rules on the Handling of Law Cases of Commercial Banks and Rural Credit Cooperatives of China Banking Regulatory Commission (CBRC), major job positions and staffs, new business and services as the main examination items and conducts special examination on the key job positions and staffs such as credit, accountants and cashiers.

To check the self-examination results of the provincial branches, in April and May CCB set up 35 special supervision and inspection teams composed of backbone staffs from 16 departments of the Headquarter and the branches and sub-branches, headed by the senior executives of the Headquarter at the general manager level to extensively inspect 38 provincial and municipal branches and their sub-branches nationwide. Up to now 120,753 person times of self-examination has been conducted in 12,306 outlets. 3,681 inspection teams including 21,392 person times have been dispatched, examining 30 routes and 320 items.