The irregularities that the National Audit Office uncovered in the Agricultural Bank of China's (ABC) 2004 accounts point to a growing need to speed up and deepen the reform of Chinese banks.
According to a report the audit office released on Monday on its website, at this bank, one of the country's largest lenders, 157 bank officials were involved in 51 criminal cases worth a total of 8.86 billion yuan (US$1.1 billion).
Besides, the auditor also uncovered other irregularities in deposits worth 14.3 billion yuan (US$1.8 billion) and illegal loans worth 27.6 billion (US$3.3 billion).
In spite of the corrective measures it has adopted, this auditing report will surely deal a heavy blow to this bank.
It is said that 22 of the irregularities have so far been settled and 95 staff members have been punished. The bank has also improved its credit management and internal audit systems, and sent out more inspectors from its headquarters to supervise work at its branches.
But that is still not enough.
In market-oriented reforms, the bank has lagged far behind China's other major State-owned commercial lenders, which have been recapitalized by the government and found foreign strategic investors. While China's three other major State banks have either got listed overseas or been finishing preparation for initial public offering, the ABC remains a long way from reaching the stock market.
