Court orders Bank of China to return clients' money, assume oil product losses

A court in Nanjing, China, ordered Bank of China Ltd. to pay back investors in its Yuan You Bao product 20% of their original investments and assume all other losses related to the product, Caixin reported Jan. 1.

The product is linked to the benchmark West Texas Intermediate futures and a plunge in oil prices in April 2020 not only wiped out the investors' money but also left many of them owing the bank money. Investors were said to be exposed to 10 billion yuan of losses.

The court's ruling came less than a month after the China Banking and Insurance Regulatory Commission fined the bank 50.5 million yuan for violating risk management rules over the sale of the Yuan You Bao product. The regulator also warned and fined individual staff involved in the product sale and suspended related operations.

As of Dec. 31, 2020, US$1 was equivalent to 6.53 Chinese yuan.