Central Bank Heavily Fines Shanghai Pudong Development Bank: Penalties Exceed 42.5 million yuan, 10 responsible persons are simultaneously held accountable, and the compliance bottom line must not be broken

On February 12, 2026, the People’s Bank of China announced a batch of administrative penalty information, with Shanghai Pudong Development Bank Co., Ltd. (hereinafter referred to as “SPD Bank”) and 10 related responsible persons collectively penalized. The total confiscation and fines exceeded 42.5 million yuan, with individual fines totaling 755,000 yuan. This enforcement covered all business areas and the entire responsibility chain, demonstrating the regulatory authorities’ firm “zero tolerance” attitude toward illegal and non-compliant behavior in the banking industry. It also serves as a warning for the entire financial sector to operate in compliance. All penalty decisions are publicly disclosed for a period of five years.

According to reports, the administrative penalty decision document number for SPD Bank is Yin Fa Jue Zi [2026] No. 27. The violations include ten different infractions across core areas such as account management, clearing and settlement, card acquiring, anti-counterfeit currency, fiscal fund management, credit reporting, and anti-money laundering. These violations nearly touch on all key compliance bottom lines of banking operations and highly overlap with the frequent violations previously found in major banks like ICBC and Bank of Communications, highlighting common shortcomings in core business compliance controls among some banks.

Specifically, the bank was found to violate basic regulations in account management and clearing operations, which could lead to superficial account reviews and irregular fund clearing processes, thereby facilitating illegal fund transfers. It also involved violations related to anti-counterfeit currency management, improper occupation of fiscal deposits or funds—damaging public interests. Violations in anti-counterfeit currency directly impact the safety of RMB circulation and market credibility, while occupying fiscal funds could hinder the normal flow and utilization of public funds. In credit reporting management, violations of regulations on the collection, provision, inquiry, and related management of credit information may infringe on the legitimate rights of citizens and enterprises. In anti-money laundering, violations include failure to perform customer identity verification as required, failure to retain customer identity data and transaction records, failure to report large or suspicious transactions, and conducting transactions with unidentified customers—directly contravening the Anti-Money Laundering Law of the People’s Republic of China. These violations facilitate illegal fund flows and money laundering activities, which are key focus areas for current regulatory enforcement.

Based on relevant laws and regulations, the People’s Bank of China imposed severe penalties on SPD Bank: a warning, confiscation of illegal gains of 275,456.08 yuan, and a fine of 42,228,900 yuan, totaling 42.504 million yuan in penalties and confiscations. This fine amount is among the highest in recent penalties for joint-stock banks, reflecting the regulatory authorities’ strong stance against systemic violations. It also exposes serious gaps in SPD Bank’s compliance management and risk control—despite being a large joint-stock commercial bank expected to serve as a benchmark for financial compliance, it has repeatedly violated basic business regulations, revealing a tendency to prioritize performance over compliance and a weak internal risk control system, contrary to the recent emphasis by regulators on strengthening internal controls in financial institutions.

A notable aspect of this enforcement is the strict implementation of the “dual penalty system,” which not only penalizes the institution but also precisely holds specific individuals accountable. This breaks the traditional pattern of penalizing only the organization and is now a standard practice in financial regulation. From the regulatory practices in 2025, over 3,000 bank employees were penalized, and the full implementation of the dual penalty system has effectively enhanced the deterrent effect and targeted enforcement, encouraging financial institutions and their staff to diligently comply and strengthen awareness of compliance. The 10 responsible persons penalized alongside SPD Bank come from various core departments, including the Credit Card Center, Operations Management Department, Information Technology Department, Retail Credit Department, Corporate Business Department, Retail Business Department, Internet Finance Department, and Legal Compliance Department. They cover all relevant business areas involved in the violations, each bearing legal responsibility corresponding to their duties. The penalties are highly aligned with their roles and the severity of the violations, demonstrating precise regulatory accountability.

Among them, Xia from the Credit Card Center bears the heaviest responsibility. Due to violations of account management regulations, credit information collection regulations, and failure to perform customer identity verification, Xia was given a warning and fined 315,000 yuan—making him the individual with the highest fine in this case, accounting for nearly half of the total individual fines.

Pan from the Operations Management Department was responsible for violations related to account management, customer identity data, and transaction record retention. He received a warning and a fine of 135,000 yuan; both violations are closely related to anti-money laundering and basic compliance.

Feng from the Information Technology Department was fined 50,000 yuan for violations related to card acquiring business, highlighting the critical role of the tech department in business compliance control.

Yan from the Retail Credit Department was fined 40,000 yuan for violations involving credit information collection, provision, inquiry, and related management regulations, an area increasingly scrutinized by regulators in recent years.

Li from the Corporate Business Department was fined 20,000 yuan for failure to perform customer identity verification as required.

Zhou from the Retail Business Department was fined 20,000 yuan for violations including failure to perform customer identity verification and conducting transactions with unidentified customers.

Lu from the Retail Credit Department was responsible for the broadest range of violations: failure to perform customer identity verification, failure to retain customer data and transaction records, failure to report large or suspicious transactions, and conducting transactions with unidentified customers. He was fined 75,000 yuan.

Xue from the Internet Finance (Mobile Finance) Department was fined 45,000 yuan for failure to perform customer identity verification and conducting transactions with unidentified customers.

Liu from the Legal Compliance (Case Prevention Office) was fined 55,000 yuan for failure to perform customer identity verification and failure to report large or suspicious transactions. As head of the compliance management department, his violations underscore the importance of the “first line of defense” in compliance control.

The total fines for the 10 responsible persons amount to 755,000 yuan, forming a linked accountability structure with the organizational penalties, reinforcing a dual responsibility framework for compliance.

This collective penalty on SPD Bank and its responsible persons is not an isolated case but reflects the current regulatory tone of “strengthening supervision and preventing risks.” In recent years, regulators have intensified efforts to investigate violations in the banking sector, focusing on account management, anti-money laundering, and consumer rights protection, with large fines frequently issued to compel institutions to improve internal controls and address risk management gaps.

Looking ahead to 2026, many industry experts expect the “strengthening supervision and risk prevention” approach to continue, with more emphasis on regulatory precision and normalization. Regulators are likely to focus on corporate governance and internal control effectiveness, data security, and consumer rights protection, actively preventing violations from rebounding.

For SPD Bank, this large fine and multiple accountability measures will likely increase compliance costs and potentially impact its market reputation. The bank will need to address internal risk control weaknesses, strengthen full-process compliance management, and shift away from a “performance-over-compliance” mindset, embedding compliance into every aspect of business development.

For the entire banking industry, this incident serves as a profound lesson in compliance. All financial institutions should take heed, strictly adhere to laws and regulations, improve internal control and risk management systems, enhance staff compliance training, and integrate compliance into all aspects of operations, personnel management, and risk prevention. Leveraging technology to build dynamic risk monitoring systems, optimizing business structures, and maintaining prudent operations are essential to ensuring stability and security in a heavily regulated environment and safeguarding the legitimate rights and interests of financial consumers.