adds details
SHANGHAI, Dec 2 (Reuters) - China's interbank market regulator said on Monday that four rural commercial banks in Jiangsu Province had inadequate internal controls over bond trading and some of their transactions involved the transfer of benefits.
The National Association of Financial Market Institutional Investors (NAFMII) said in a statement it found excessive incentives for traders at these banks, leading to distorted trading behaviors such as frequently quoting and withdrawing quotes.
The announcement comes four months after the regulator initiatied a probe into the matter as the bond market had a record-breaking rally.
The four banks are Changshu Rural Commercial Bank 601128.SS, Kunshan Rural Commercial Bank, Jiangsu Suzhou Rural Commercial Bank Co 603323.SS, and Jiangnan Rural Commercial Bank, according to the statement.
The cases will be referred to the relevant departments for further action, the NAFMII said.
Meanwhile, China's 10-year yield dropped below 2% to hit its lowest point on record on Monday, breaking a psychological barrier as a sputtering economy and bets on further rate cuts drive investors into the safety of bonds.
(Reporting by Shanghai NewsroomEditing by Bernadette Baum)
((Li.Gu@thomsonreuters.com;))
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