Economy Jun 08

PBoC imposes new rules to counter corruption

China's central bank says there will be greater checks to prevent employees on low salaries wining and dining with service providers to limit the potential for graft

PBoC imposes new rules to counter corruption
Yao Gang, center, a former vice-chairman of the China Securities Regulatory Commission, stands to hear his verdict at the Intermediate People's Court in Handan city in Hebei province in Sept 2018. He was sentenced to 18 years jail for taking bribes and insider trading, and fined 11 million yuan ($1.7 million) after being found to have abused his power between 2006 and 2015, when he received 70 million yuan in bribes through relatives in exchange for holding back inquiries into dodgy deals, the court said. His wealth was seized and given to the State treasury. Photo: An Xin / Imaginechina via AFP

(ATF) China has issued a new set of rules about conduct for staff at the People's Bank of China – the central bank. Currently there is struggle behind the scenes due to issues related to the coronavirus, the economic downturn and internal dissent as the CCP chairman rolls back social reform, while the dollar-hungry country is trying to open up financial markets to foreign capital.

PBOC salaries are relatively low, so given where they work, opportunities for graft are myriad. At the same time, cadres rise and fall depending on which fiscal policy action they support.

Top brass – the PBoC's Discipline Inspection and Supervision Group – in conjunction with the bank's party committee and the State Administration of Foreign Exchange jointly issued the new “Regulations on Corrupt Communication between the Staff of the People’s Bank of China and the State Administration of Foreign Exchange and Management Services”.

The strict rules clarify eight things that are banned. For example, central bank staff are forbidden from enjoying banquets or free gifts in the execution of their official duties. They are prohibited also from receiving part-time remuneration for violations of regulations.

Meanwhile, non-business interaction with financial management service providers should also be reported, along with any other pertinent matters – “to reduce the soil that may breed corruption from the source.” The rules aim to promote a self-purification and self-improvement of cadres at the bank.

In recent years, the People's Bank of China has been heavily promoting comprehensive and strict governance of the party, and showing an overall improvement. However, judging from the investigation and handling of matters of impropriety, there are still a few party cadres who do not know how to stop accepting food and drink, taking bribes on their own initiative, and seeking power for personal gain. 

These new rules brush away any “grey zone” around the accepting of gifts and other favours.

The regulations on clean dealings lay out a  gift registration system as well as a system to report all official and non-official communication. Staff are required to take the initiative to report and register. High-level cadres may attend mandatory banquets for management as long as none of the eight rules are not broken.

Officials have warned that there will be increased supervision and management of the interaction between staff and service providers, with disciplinary inspectors at all levels to strengthen supervision and check that regulations are being implemented and adhered to along with party organisations' rules, the notice said. People caught flouting the rules will face administrative penalties, it said.