2020-11-21

Big weekend! These financial industry leaders were named and notified! Illegal charges, mandatory bundling…

By yqqlm yqqlm

Illegal collection of free fees, mandatory bundling sales, high service fees and agency fees in loans… many banks and insurance institutions were notified.

On November 21, the China Banking and Insurance Regulatory Commission website issued the”Notice on Typical Issues Concerning the Violations of Some Banking and Insurance Institutions and Lending Institutions Raising the Comprehensive Financing Cost of Small and Micro Enterprises.” The”Notice” was signed by the Supervision Office of the General Office of the State Council and the General Office of the China Banking Regulatory Commission.

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Illegal collection of loan commitment fees, etc.

The”Supplementary Notice on Supporting Commercial Banks to Further Improve Financial Services for Small and Micro Enterprises” stipulates that, except for syndicated loans , Commercial banks shall not charge commitment fees or fund management fees for loans to small and micro enterprises, and strictly limit the collection of financial advisory fees and consulting fees on small and micro enterprises.

The supervision found that some branches of ICBC illegally charged small and micro enterprises with loan commitment fees, investment and financing consulting fees and other “two prohibitions and two restrictions” fees. According to investigations, from January 2017 to October 2019, 9 branches including ICBC Jiangxi Branch, Hebei Branch, Henan Branch, Shanghai Branch, Jiangsu Branch, Sichuan Branch, Guangxi Branch, Liaoning Branch, and Shandong Branch violated regulations to 20 small businesses. Micro-enterprises charged 22.848 million yuan for”two prohibitions and two restrictions” such as loan commitment fees and investment and financing consulting fees.

In addition, Minsheng Bank Headquarters Group Finance Department and some branches illegally charge small and micro enterprises loan commitment fees,”Two prohibitions and two limits” fees such as bank acceptance bill exposure management fees and legal person account overdraft business commitment fees.

According to investigations, from September 2016 to November 2019, Minsheng Bank illegally charged small and micro enterprises with a fee of RMB 43,695,300 for the “two prohibitions and two restrictions”. Among them, Minsheng Bank Beijing Branch, Shanghai Branch, Harbin Branch illegally charged loan commitment fees, involving 3 households, 4 transactions, with a total amount of 13.724 million yuan; Minsheng Bank Headquarters Group Finance Department and Minsheng Bank Fuzhou Branch, Suzhou Branch, Shenzhen Branch, Shijiazhuang 17 branches, including branch, Guangzhou branch, Chengdu branch, Xiamen branch, Dalian branch, Taiyuan branch, Beijing branch, Quanzhou branch, Chongqing branch, Jinan branch, Changsha branch, Wuhan branch, Zhengzhou branch, Qingdao branch, etc., illegally collected bank acceptance drafts Administration fees, involving 180 households, 1975 transactions, with a total amount of 29,053.5 million yuan; the Group Finance Department of Minsheng Bank Headquarters and Minsheng Bank Shanghai Branch, Hangzhou Branch, Nanchang Branch, Quanzhou Branch, Zhengzhou Branch and other five branches illegally charged legal person account overdrafts. Commitment fees, involving 8 households, 10 transactions, totaling 91.7 million yuan.

Compulsory Bundled Sales

The supervision found that Minsheng Bank sells personal accident insurance with higher insurance rates to customers under the premise of existing mortgages. Withdraw high agency fees. According to investigations, from September 2016 to November 2019, Minsheng Bank had a total of 101,900 small and micro enterprise personal business loans (guarantee method is mortgage) customers purchased the borrower accident insurance on behalf of the bank, 67%of the loans Personal accident insurance premium amount/loan amount is not less than 0.40%. The bank and the vast majority of insurance companies have passed a general-to-management cooperation agreement, stipulating that the agency fee rate is 50%-80%of the premium.

For example, from September 2016 to November 2019, customers of 2684 individual industrial and commercial households and small and micro business owners of Hangzhou Branch of Minsheng Bank purchased Borrower Accident Insurance of Everbright Sun Life Insurance Company. The client paid a premium of RMB 18.4724 million to Everbright Sun Life Insurance Company, and Sun Life Everbright Life Insurance Company paid an agency fee of RMB 14.7779 million to the Hangzhou Branch of Minsheng Bank. The agency fee accounted for 80.02%of the premium. A spot check of some insurance policies shows that the relevant insurance premium rate is 0.39%-0.5%, which is several times that of general personal accident insurance.

In addition, Ping An Insurance (Group) subsidiary Ping An Puhui cooperated with the Industrial Bank to issue inclusive loans for small and micro businesses, compulsory bundled sales of insurance, and high service fees, which pushed up comprehensive financing costs.

According to investigations, Ping An Puhui Financing Guarantee Co., Ltd., a subsidiary of Ping An Insurance (Group) Co., Ltd. of China, when cooperating with Industrial Bank to carry out inclusive loan business, forced the sale of Ping An Property and Casualty Insurance Company of China. Loan guarantee insurance does not provide other credit enhancement methods or other insurance company products for customers to choose, which infringes consumers’ right to choose and fair transactions. Industrial Bank relies on third-party cooperation channels to obtain customers, ignoring the assessment of the partners’ fees and comprehensive financing costs. Industrial Bank provides all loan funds with an annual interest rate of 6.32%-7.6%; Ping An Property Insurance Co., Ltd. of China assumes the performance guarantee responsibility for 99%of the loan amount, with a nominal monthly premium rate of 0.12%; Ping An Puhui Finance Guarantee Co., Ltd. is responsible Customer acquisition and collection of non-performing loans, as well as joint guarantees that assume 1%of the loan amount, the nominal monthly guarantee rate is 0.33%, and the nominal monthly service fee rate is 0.09%-0.65%.

For example, a customer’s loan principal in May 2019 was 3.82 million yuan, with a term of 3 years, and the loan interest rate was 7.6%. The bank would adopt a method of equal principal and interest repayment. Industrial Bank is expected to collect loan interest of 464 thousand yuan. Ping An Property Insurance Co., Ltd. is expected to collect insurance premiums of 163,400 yuan, and Ping An Puhui Financing Guarantee Co., Ltd. is expected to collect guarantee fees of 4,538 yuan and service fees of 811,400 yuan. The annualized comprehensive financing cost is 22.16%. Among them, Ping An Puhui Finance Guarantee Co., Ltd. charges 56.53%of the comprehensive financing costs.

Take a lesson and draw inferences

It is reported that the China Banking and Insurance Regulatory Commission is currently working with relevant parties to deal with the problems found in the supervision and inspection in accordance with laws and regulations. The Supervision Office of the General Office of the State Council will closely follow the progress of related work and urge the rectification of problems in place.

The”Bulletin” emphasizes that all bancassurance institutions and lending institutions should learn from one another, learn from one another, earnestly implement the decisions and arrangements of the Party Central Committee and the State Council, and closely focus on the”six stability” and”six guarantees.” Vigorously protect and stimulate the vitality of market entities, strengthen financial support for stable enterprises, and actively alleviate difficulties for enterprises, so that the availability of loans for small, medium and micro enterprises will be significantly improved, and the comprehensive financing cost must be significantly reduced; the six departments including the China Banking and Insurance Regulatory Commission must strictly implement the”About Further standardize credit financing charges and reduce the comprehensive cost of corporate financing. The relevant provisions of the”Notice” to effectively safeguard the right to know, independent choice and fair transaction rights of lending companies, and must not use market superiority to attach unreasonable conditions, force bundled sales, pass on costs, and illegal charges , To increase the hidden financing costs of small and micro enterprises in disguise; to strengthen corporate governance, implement the main responsibility for the management of branches or subsidiaries, strengthen the management of cooperation with third-party institutions, and comprehensively evaluate the comprehensive financing costs of loan assistance and credit enhancement. Improve comprehensive management performance evaluation methods, strict internal control and audit supervision, and prevent internal and external collusion and joint damage to the interests of small and micro enterprises. Regarding ignorance of the prohibition and violations against the wind, the financial regulatory authorities will find out and deal with them together, and will never tolerate them.

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(Edit Gong Xinyu)