SHANGHAI – The Industrial and Commercial Bank of China (ICBC) announced on Friday that it will restrict certain types of retail businesses involving the trading of currencies and commodities.
The move by China’s largest bank comes with a series of measures taken by regulators to reduce financial risks, including mitigating rising commodity prices, banning cryptocurrency transactions, and the restriction of real estate speculation.
The bank’s restrictions also come as global energy prices have risen in response to power shortages in China and other parts of the world.
ICBC said in a statement that as of October 17, it will suspend further account openings for so-called “forex account activities”. As part of this activity, individuals may exchange currencies for the yuan for speculative or hedging purposes, and may not withdraw or transfer foreign currencies from trading accounts.
From November 14, existing clients will no longer be able to open new trading positions.
ICBC will also cease accepting new clients from Oct. 17 in a similar business activity involving energy, base metals, agricultural commodities and precious metals indices, according to the ICBC statement.
“The risk is high these days in the global currency and commodity markets, so be careful to control the risks,” the bank said.
In recent months, ICBC and other banks, including the Bank of China and China Merchants Bank, have shut down currency trading businesses that allowed individual clients to bet on currency pairs other than the yuan.
Chinese regulators have tightened their control over the country’s currency market, Reuters reported last month.
Chinese banks have been burned by risky investment products in the past. Last year, Bank of China customers suffered losses on a crude oil product after lower oil prices.
(Report by the Shanghai Newsroom edited by David Goodman and Jane Merriman) (([email protected]; + 8610-5669-2129;))