(Yicai) Dec. 31 -- China’s central bank has imposed big fines on three financial institutions for irregular bond-trading practices, after ramping up oversight of the interbank bond market.

Shanghai East Asia Futures, Hunan Xupu Rural Commercial Bank, and Central Tanshi were fined a total of CNY68.8 million (USD9.4 million), the People’s Bank of China announced yesterday. Their irregular practices included improper account lending and actions intended to bypass regulatory and internal control measures, it said.

Shanghai East Asia Futures was fined CNY44.6 million, Hunan Xupu Rural CNY13.1 million, and Central Tanshi CNY11.1 million. They were also given warnings after not fulfilling their obligations to identify clients. 

The central bank recently detected abnormal trading behavior among some participants in the interbank bond market, a source close to the PBOC said. After looking into the leads, the three institutions were suspected of breaching regulations governing interbank bond trading. As a result, the PBOC immediately launched investigations, the person added.

The PBOC reportedly summoned certain financial institutions for a meeting earlier this month, reiterating its zero tolerance for illegal and non-compliant behavior in the bond market.

China's bond market has been bullish over the past two years, leading to financial institutions raking in substantial profits from their fixed-income businesses. But some staff have taken advantage of their weaker internal controls to conduct non-compliant activities.

The PBOC has implemented regular monitoring and administrative law enforcement for the interbank market since the start of this year and will continue to verify and check suspected violations, the source close to the bank noted.

Editors: Liao Shumin, Martin Kadiev