GREATER CHINA
* The U.S. Federal Reserve issued a cease-and-desist order against Beijing-based Industrial & Commercial Bank of China Ltd. and its New York branch for failing to comply with anti-money laundering rules and the Bank Secrecy Act. Under the enforcement action, the entities have agreed to submit a written plan to enhance oversight and compliance with their BSA/AML requirements as well as regulations issued by the U.S. Treasury Department's Office of Foreign Assets Control.
* Chinese sovereign wealth fund China Investment Corp. divested its stake in U.S.-based private equity firm Blackstone Group LP, the Financial Times reported. Neither of the two companies disclosed the reason why the fund sold its shareholding, which originally amounted to a 9.9% stake when CIC acquired the shares for US$3 billion in 2007. CIC has since sold and bought stakes in Blackstone following its original purchase. Its latest decision to sell came amid increasing trade tensions between Washington and Beijing, the report said.
* Hong Kong's Securities and Futures Commission fined investment bank CLSA Ltd. HK$9 million for internal control failures relating to its client facilitation services and reporting obligation. The authority also fined Deutsche Bank Aktiengesellschaft and unit Deutsche Securities Asia Ltd. a total of HK$8.3 million for regulatory breaches, such as failure to comply with short position reporting requirements and failure to segregate client monies.
* Hong Kong Exchanges & Clearing Ltd. and U.S.-based index compiler MSCI Inc. are planning to create new futures contracts that would track hundreds of Asian companies, Bloomberg News reported. The two entities are looking at a product tied to the MSCI AC Asia ex-Japan Index which tracks almost 650 companies from Asian countries excluding Japan, according to a document obtained by the news outlet. The plan is subject to regulatory approval.
* Taiwan's Financial Supervisory Commission will ban 46 branches of Chunghwa Post Co. Ltd. from selling life insurance products for six months after a postal employee was found to have misappropriated NT$700 million in insurance premiums paid by over 300 customers holding 887 policies, the Taipei Times reported. The ban is expected to take effect in the week of March 19.
JAPAN AND KOREA
* U.S.-based investment manager KKR & Co. LP is set to issue its first yen-denominated bonds in March to raise funds for investing in Japanese companies, The Nikkei reported. KKR will issue five- and seven-year bonds amounting to an estimated ¥30 billion, and may issue more bonds with longer tenures if investors show strong demand.
* Japanese life insurers are offering more benefits to new and existing policyholders amid a prolonged life span in the country, The Nikkei reported. Dai-ichi Life Insurance Co. Ltd., Fukoku Mutual Life Insurance Co. and other insurers are expected to increase dividend payouts to existing customers and lower premiums for new customers.
* South Korea's Financial Supervisory Service launched a special in-house counsel team headed by Deputy Governor Choi Seong-il, to look into alleged irregularities in hiring entry-level employees at Hana Financial Group Inc. and unit KEB Hana Bank, The Korea Herald reported, citing officials. The move follows Governor Choe Heung-sik's resignation amid allegations he was involved in irregular hiring practices during his tenure as president of the financial group.
ASEAN
* Singapore-based ride-hailing service Grab and Japan's Credit Saison Co. Ltd. formed a joint venture called Grab Financial Services Asia to provide loans and lending services across Southeast Asia. Grab also partnered with Swiss insurer Chubb Ltd. to offer in-app insurance services to drivers and customers in the region.
* The Thai Cabinet approved in principle a draft royal decree on trading in digital assets and an amendment to the country's revenue code, which would allow the government to impose tax on capital gains or dividends from cryptocurrency investments, Krungthep Turakij reported, citing Nattaporn Jatusripitak, an adviser to the prime minister's office.
* The Bank of Thailand warned local lenders to refrain from overcharging borrowers after it was found that some banks failed to comply with guidelines and unfairly collected fees from customers, Post Today reported.
* Kasikorn Business-Technology Group, a subsidiary of Thailand-based Kasikornbank PCL, introduced "KADE," a new artificial intelligence-driven financial service on its mobile application, Krungthep Turakij reported. The AI technology is expected to boost the number of mobile banking users to 20 million from the current 8 million within five years.
* Indonesia's Financial Services Authority is considering a cap on interest rates and on the size of loans that a fintech company can offer to rein in the risk of defaults, Reuters reported, citing Eko Ariantoro, director of the financial inclusion development directorate at the regulator. Ariantoro said the proposed maximum lending rate is still under discussion. Data from the authority showed that loans from peer-to-peer lending rose to 3 trillion rupiah as of January from 247 billion rupiah as of December 2016, while annual growth in bank lending slowed to less than 10% from 20% in past years.
* Indonesia-based PT Bank Agris Tbk received shareholder approval to sell 87.3% of its shares to South Korea's Industrial Bank of Korea, Bisnis Indonesia reported.
SOUTH ASIA
* The Reserve Bank of India barred lenders from issuing letters of undertaking, which are the instruments used in the fraud case detected at Punjab National Bank. The central bank also prevented lenders from issuing letters of comfort as trade credit for imports into the country, effective immediately. However, letters of credit and bank guarantees for trade purposes are allowed to be issued, subject to compliance with the country's laws.
* India's Punjab National Bank told the country's law enforcement agencies that it discovered additional exposure of approximately 9.42 billion rupees linked to a fraud case detected at the lender in February, Reuters reported, citing a court filing seen by the news outlet. The agencies had attributed 61.38 billion rupees of the alleged fraud amount to Mehul Choksi's Gitanjali group of companies, and almost 65 billion rupees to Nirav Modi-controlled companies.
* India-based RBL Bank Ltd. tied up with local fintech platform CreditVidya for instant verification of individuals' employment details, enabling a reduced turnaround time for credit assessments, The Economic Times reported. Harjeet Toor, business head for retail, inclusion and rural business at the lender, said the partnership will enable lower underwriting costs in credit cards and personal loans, as well as avoiding employment-related fraud.
* China's Alibaba Group Holding Ltd. affiliate Ant Financial Services Group entered into a strategic partnership with Norwegian telecom giant Telenor Group to offer mobile payment and inclusive financial services to individuals and small and micro businesses in Pakistan. Under the partnership, Ant Financial will invest US$184.5 million for a 45% stake in Pakistan's Telenor Microfinance Bank, a unit of Telenor Group.
* Nepal Investment Bank Ltd. entered into a remittance trading agreement with South Korea-based E9Pay Co. Ltd., The Himalayan Times reported, citing a media release. Under the agreement, Nepalis working in South Korea will be able to transfer money from their bank accounts to the Nepali bank's Prithivi Remit product or any commercial or development lender through the E9Pay mobile app.
AUSTRALIA AND NEW ZEALAND
* Australia's banking royal commission, a judicial inquiry into the country's financial sector, opened with evidence that National Australia Bank Ltd. issued more than A$24 billion in home loans between 2013 and 2016 under a scheme using fraudulent documents and dishonest use of customers' signatures, Reuters reported, citing Rowena Orr, a barrister assisting the inquiry. Orr said the misconduct at the lender involved instances of collusion, fraud and bribery that were not reported to the authority in a timely manner.
* Commonwealth Bank of Australia was slammed for giving an incomplete submission to the royal commission, and then handing up meaningless spreadsheets to the commission's offices, The Sydney Morning Herald reported, citing Rowena Orr. According to the barrister, the bank's submission "did not disclose the totality of the conduct that constitutes misconduct, or conduct that falls below community expectations." The bank was also forced to admit 17 cases of misconduct or conduct falling below community standards in its wholly owned mortgage broker Aussie Home Loans, the report added.
* Westpac Banking Corp. raised A$1.69 billion from an offering of about 16.9 million Capital Notes 5. The margin was set at 3.20% annually, and the notes are expected to begin trading on the Australian Securities Exchange on a normal settlement basis on March 21.
IN OTHER PARTS OF THE WORLD
Middle East & Africa: QNB seeks higher foreign ownership cap; Ghanaian bank to raise 330M cedis in IPO
Europe: ING scraps CEO pay rise plan; Monte dei Paschi names CFO
Latin America: Davivienda's Q4 profit tumbles; Cade expected to OK Itaú-XP deal
North America: BofA CEO paid 250x more than median worker; Warburg Pincus in $370M Vietnam deal
North America Insurance: Conservative groups oppose ACA bailouts; GEICO changes way it sets NY premiums
Janna Estares, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.
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