China punishes 7 banks for loans misused on stocks

BEIJING, March 4 (Reuters) - China has punished seven banks after loans that they made were misused for stock investments, and the banking regulator instructed them to immediately recall this credit, a local newspaper reported on Thursday.

The total amount of the misused loans was 13.4 million yuan ($1.96 million), China Business News said, citing unnamed sources.

The punishment, meted out by the Shenzhen arm of the China Banking Regulatory Commission, would affect local branches of major lenders, including China Construction Bank, Bank of China and China Merchants Bank, it said. (Reporting by Langi Chiang and Simon Rabinovitch; Editing by Ken Wills)