China's financial regulator will take over privately owned online lender Wuhan Zhongbang Bank for one year from July 3, the watchdog said on Friday, marking another step by authorities to prevent risks at small financial institutions.
The takeover was imposed because of "severe credit risks" at the bank, the National Financial Regulatory Administration said in a joint announcement with the Hubei provincial government.
Zhongbang Bank was established in May 2017 as China's 11th private lender with registered capital of 2 billion yuan (HK$2.3 billion), which was increased to 4 billion yuan in 2020.
The lender is based in central China's Hubei province and is owned by six private companies, with Zall Holding the largest shareholder with a 30 percent stake.
The bank's shareholder meetings, board of directors and supervisory board have been suspended and the takeover team will assume all management functions.
The takeover team is led by Hubei's provincial financial authority and the Wuhan municipal government. It also includes the National Financial Regulatory Administration's Hubei bureau, Deposit Insurance Fund Management and the Hubei branch of the People's Bank of China.
Customer operations will continue as normal and depositor and client rights will be legally protected, the regulator said.
Reuters
