CBRC tightens rules for commercial banks

China's top banking regulator has drafted a regulation on equity management for commercial banks to tighten controls on financial risk and combat illegal activities.

The China Banking Regulatory Commission started soliciting public opinion on Thursday on the interim regulation on equity management, which would impose stricter supervision on major shareholders of commercial banks.

"Currently, social capital's enthusiasm for initiating the founding of, holding a stake in, or acquiring banking institutions keeps rising. But the enthusiasm has been followed by disorder. For example, some shareholders violated the rule by using funds out of others' pockets to buy shares in a commercial bank, holding shares on behalf of another, or abusing shareholder's rights to harm the interests of a bank. To rectify the chaos and remedy the regulatory weak link, the CBRC organized the drafting of the latest regulation," the regulator said in a statement posted on its website.