Bank of China and Citic Bank are evading capital control laws and enabling wealthy Chinese to move large sums of money out of the country, says China Central TV (CCTV).
Bank officials deny any wrongdoing.
The media outlet, which is a mouthpiece of the Chinese government, accused the two banks of “money laundering” in a televised investigative report. As both banks are also closely associated with the Chinese government, it’s a bit like the right hand accusing the left hand of criminal activities.
BOC, like CCTV, is one of the so-called central enterprises directly supervised by the State Council. To release such detailed and serious accusations against the bank suggests CCTV acquired approval in advance.
Wei Wuhui, a Shanghai-based media researcher, said: “It’s rare to see CCTV going after a state-owned enterprise like the Bank of China.
“And it is not just targeting one branch, but the whole BOC. The accusation of money laundering is also a serious charge. This is so rare and so severe.”
More: Like Bank of China, Citic Bank Also Offers Service Branded ‘Money Laundering’ by CCTV
According to the linked report at South China Morning Post, many Chinese banks assist wealthy account holders in moving their funds offshore. Chinese law limits foreign transfers to US$50,000 a year, so Chinese hoping to emigrate or invest abroad must find ways to circumvent the restrictions.
Chinese money authorities have also cracked down on so-called money laundering in the Special Administrative Region of Macau, where mainlanders have been able to use illicit ATMs to withdraw money above the legal limits from their bank accounts.
Mainlanders also try to transfer money to Hong Kong for later transfer offshore, as Hong Kong has no capital controls.
The added scrutiny of financial institutions may be part of President Xi Jinping’s anti-corruption efforts.