Liu Minxia

AS part of a national probe, Shenzhen banks are being urged to review their wealth management services offered to individuals to minimize the risks for investors.

The China Banking Regulatory Commission (CBRC) issued a guideline last Friday requiring lenders to tighten regulations covering wealth management services.

The Shenzhen bureau of the CBRC said Thursday it had launched a 15-day investigation starting Wednesday into all commercial banks in the city, including locally incorporated foreign banks.

Employees of the bureau will visit bank branches and sub-branches in Shenzhen in the name of ordinary investors to make inquiries about wealth management services offered by the banks.

The bureau said it would stop banks offering wealth management services to individuals if problems were found that would have been avoided by tighter regulation.

A minority of commercial banks had been deficient in wealth management product design, client evaluation, risk control and information disclosure, chairman of the CBRC, Liu Mingkang, said in a video-conference with the Shenzhen bureau Tuesday.

Several banks in Shenzhen said they were reviewing their wealth management services in accordance with the guidelines.

“We are making preparations and hope to pass the probe,” said a manager with Shenzhen Development Bank who declined to be identified.

China Minsheng Banking Corp. surprised domestic investors last month after it liquidated a fund that invested in overseas securities under China’s qualified domestic institutional investor, or QDII, program. Minsheng had agreed to liquidate the fund when assets fell below 50 percent of their initial value amid global market slump.

A recent survey by the CBRC found at least 10 wealth management products offered by domestic banks brought no returns or even incurred losses amid turbulence in global financial markets.