China's banking watchdog has tightened rules restricting regulatory officials and their relatives from joining banks, as it bids to limit corruption risks, Caixin reported Aug. 1.
The new China Banking Regulatory Commission rules aim at tightening what is commonly known as the "revolving door" practice of officials moving between public and private sector jobs. They include barring staff of a certain seniority — and their family members — from taking jobs at financial institutions within three years after stepping down from the government. The relatives comprise parents, siblings, parents' siblings, spouses and children. Officials who have left the government for more than three years would still need regulatory clearance to join a bank, the news outlet said.
Further, regulators should be removed from their posts if their spouses, parents, children or their spouses, siblings or their spouses, or parents-in-law work at a financial institution or hold equity stakes of at least 5% in one directly supervised by the officials.
CBRC staff who have been in a "key" position for five years would also be rotated elsewhere. This was an "important" new rule since some senior officials have spent more than a decade in one role, Caixin said, citing a CBRC official.
There will also be closer scrutiny on officials who transfer to financial institutions to help with cleanup, as this has affected regulatory independence while bypassing existing "revolving door" restrictions, a source told the news outlet.
China's State Council recently removed Yang Jiacai, the CBRC's assistant chairman, from his post and the Central Commission for Discipline Inspection has placed him under investigation for suspected corruption. Yang's wife, who worked for a financial institution in Shanghai, is also under probe as a large amount of her bank account stems from unknown sources, Caixin said, citing sources with knowledge of the investigation. The news outlet added their son, Yang Hao, who runs a mobile app carwash service, is also under investigation.