A Case Study On Loan Fraud Of Qilu Bank

City Commercial Bank is an important component of China’s banking industry, it is developed on the basis of urban credit cooperatives which founded in the1980s. City Commercial Bank’s business mainly aims to serve for urban residents, provide the public with convenient financial services; serve for small and medium-sized enterprises, provide financial support to them; serve for the local economy, pave the way for the local economic development. Because of the increasing liberalization and diversification in the financial industry, it is very important to maintain the normal and stable operation of City Commercial Bank.However, in recent years, with the rapid development of China’s banking industry, the increasing pressure and continuous innovation have forced City Commercial Banks to face more complex challenges. It leads many banks to take the blind expansion driven by the interests, only focus on business development but ignore the management of its internal control, it is easy to induce a variety of expansion problems. Once its risk control ability cannot match the degree of its expansion, it will bring more potential risks. In this case, it is easy to give criminals opportunities to commit crimes, similar cases occur frequently in recent years. Such as Guiyang Bank loan fraud case, Bohai Bank loan fraud case and Qilu Bank loan fraud case and so on. The reasons of these cases are complicated, but the lack of internal control management is the most important reason. Effective internal control is a prerequisite for the security and stable operating of City Commercial Banks, grasp the internal control is the core of continuing operation and sustained profitability. In order to face the risks from internal and external better, control a variety of risks better, we must strengthen the internal control capacity of the City Commercial Banks. In order to make the City Commercial Banks maintain good operating condition, serve for our financial industry better, it is very important to analysis and research internal control issues on China’s Commercial Banks deeply.In this paper, we take the Qilu Bank loan fraud case which disclosed in late2010for example, introduce the process of this case in detail and analysis the internal control problems. This article is divided into four chapters, the beginning part is the introduction part, mainly includes the paper’s research background and research significance, the related literature review, research ideas and methods and the innovation part. The first chapter is the case introduction part, firstly introduces the general situation of Qilu Bank, secondly analyses the process of the case、the process of resolve, thirdly analyses the impact on Qilu Bank and the revelation to the whole banking of the case. The second chapter analyses the problems the case reveals through the internal control aspect. The third chapter puts forward some suggestions about the internal control of the City commercial banks.