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-counterfeiting 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 penalized at large banks like ICBC and Bank of Communications, highlighting common shortcomings in core business compliance management among some banks.

Specifically, the bank was found to have violated regulations related to basic operations such as account management and clearing, which could lead to superficial account reviews and irregular fund clearing processes, thereby facilitating illegal fund transfers. It also involved violations in anti-counterfeit currency management, improper withholding of fiscal deposits or funds, damaging public interests. Violations in anti-counterfeit currency directly impact the safety of RMB circulation and market credibility, while withholding fiscal funds could affect the normal flow and efficiency of public funds. In credit reporting, violations of regulations on the collection, provision, inquiry, and management of credit information may infringe on citizens’ and enterprises’ legal rights. In anti-money laundering, violations include failure to perform customer identity verification as required, failure to retain customer identification 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: issuing a warning, confiscating illegal gains of 275,456.08 yuan, and imposing a fine of 42,228,900 yuan, totaling 42.5 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 reveals 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 compliant financial operations, it has repeatedly violated basic business regulations, exposing a “performance-over-compliance” operational tendency and a weak internal risk control system, contrary to the recent emphasis by regulators on strengthening internal controls within 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 assigns responsibility directly to specific individuals, breaking the traditional pattern of penalizing only the organization. This approach has become a standard practice in current 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 of administrative penalties, 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 closely 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 technology department in business compliance.

Yan from the Retail Credit Department was fined 40,000 yuan for violations related to credit information collection, provision, inquiry, and management regulations, an area that has been a focus of recent regulatory enforcement.

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 four violations: failure to verify customer identity, 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 Department (Mobile Finance Department) was fined 45,000 yuan for failure to verify customer identity and conducting transactions with unidentified customers.

Liu from the Legal Compliance Department (Case Prevention Office) was fined 55,000 yuan for failure to verify customer identity and failure to report large or suspicious transactions. As head of the compliance management department, his violations highlight 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 organization’s penalties, reinforcing a dual responsibility framework of organizational accountability and individual pursuit.

This collective penalty for SPD Bank and its responsible persons is not an isolated case but a reflection of the current regulatory tone emphasizing “strict supervision and risk prevention.” 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 financial institutions to improve internal controls and address risk management weaknesses.

Looking ahead to 2026, many industry experts expect the “strict supervision and risk prevention” approach to continue, with regulatory precision and normalization becoming more prominent. Authorities will likely 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 individual accountability will increase compliance costs and potentially impact its market reputation. The bank will need to address internal risk control gaps, strengthen full-process compliance management, and abandon the “performance-over-compliance” mindset, integrating compliance into every aspect of business development.

For the entire banking industry, this incident serves as a profound compliance warning. All financial institutions should take heed, strictly adhere to laws and regulations, improve internal control and risk management systems, enhance staff compliance training, and embed compliance into all business operations, personnel management, and risk prevention. Additionally, leveraging technology to build dynamic risk monitoring systems, optimize business structures, and ensure sound operation in a heavily regulated environment is essential to safeguarding financial market stability and protecting consumers’ legal rights.