Regulator Steps Up to Curb Banks’ Improper Sales Practices
(Beijing) — Sales of investment products that involve bank staff and take place in banks’ premises must be recorded both visually and audibly, the China Banking Regulatory Commission (CBRC) said Wednesday.
The move is part of China’s ongoing campaign to protect customers from being misled or lured into buying products that are not suitable for their risk profile, as well as to curb improper selling practices.
The latest rule does not apply to sales of treasury bonds and gold bars, the CBRC said, without elaborating. The rule will take effect as of Oct. 20, but the CBRC didn’t spell out the penalty if a bank fails to comply.
The latest CBRC statement laid down detailed guidelines on when sales must be recorded. It came as some bank staff reportedly sold wealth management products (WMPs) to customers at self-help terminals where there were no recorders. The latest rule states that all sales of WMPs must be conducted at counters where there are recording facilities.
The regulator reiterated that bank staff should follow a protocol in introducing products to customers, which should include information on underlying assets, issuers, credit-risk ratings and its type of returns. Lenders are “banned to use alluring or misleading words for promotion” or guide clients to buy products beyond their risk appetite, the CBRC said.
Most Chinese banks are now recording their sales as a measure to get rid of improper practices, such as selling unauthorized products or inflating returns, Caixin reported earlier.
Contact reporter Leng Cheng (email@example.com)
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