Wu Xiaomeng and Leng Cheng via Caixin | Sales of investment products that involve bank staff and take place in banks premises must be recorded both visually and audibly, the China Banking Regulatory Commission (CBRC) said Wednesday.
The move is part of China’s ongoing campaign to protect customers from being misled or lured into buying products that are not suitable for their risk profile, as well as to curb improper selling practices.
The latest rule does not apply to sales of treasury bonds and gold bars, the CBRC said, without elaborating. The rule will take effect as of Oct. 20, but the CBRC didn’t spell out the penalty if a bank fails to comply.
The regulator reiterated that bank staff should follow a protocol in introducing products to customers, which should include information on underlying assets, issuers, credit-risk ratings and its type of returns. Lenders are “banned to use alluring or misleading words for promotion” or guide clients to buy products beyond their risk appetite, the CBRC said.
