BEIJING- China's banking watchdog has penalized 49 staff members of 11 
banking institutions who were responsible for funding an unauthorized power 
plant that has been criticized by the central government.
Nine banks and 
two financing firms for power companies were responsible for slack examination 
procedures before approving the credit and for poor management of the loans to 
the north China-based Inner Mongolia Power Group Co., Ltd., which constructed 
the plant and other six illegal power projects, said the China Banking 
Regulatory Commission.
The disgraced 
institutions include the country's "big four" state-owned lenders -- the China 
Construction Bank, the Bank of China, the Agricultural Bank of China and the 
Industrial and Commercial Bank of China.The commission did not reveal the 
specific penalties. 
The project, the Xinfeng thermal power plant, came under fire in August last 
year, when it was openly criticized by the State Council, China's cabinet. 
Six people died and eight were injured in the construction of plant, and the 
power company had failed to follow standard procedures in project approval, land 
acquisition and tendering, said the State Council.
Regional authorities 
received disciplinary and judicial penalties for failing to stop the project and 
enforce the central government's macro-control policies aimed at curbing 
investment to prevent the economy from overheating. The commission, together 
with the National Development and Reform Commission and the National Audit 
Office, reinvestigated the legitimacy and management of all bank loans to the 
power company from September 18 to 27. 
The country's banking institutions must learn from the case and resolutely 
implement central macro-control policies, said the commission. It urged all 
financial institutions to strengthen risk management of large corporate 
customers and strictly examine the legitimacy of their credit.