China’s first consumer credit company has become the latest financial firm to be hit by scandal after the banking regulator fined it for malpractice, and handed out individual punishments to its four Executives. Bank of Beijing Consumer Finance Company, which was established in 2010 with the hope of finding a business model for consumer credit in China, was fined CNY9 million for “seriously violating prudent operating principles”, including running unauthorized businesses, filing false documents, and hiding important facts from the regulator, the Beijing branch of the China Banking Regulatory Commission (CBRC) said in a statement. Two executives were fined CNY500,000 and CNY200,000 and two others were barred from working in China’s banking industry for 12 years and two years.

“The biggest difficulty for consumer finance in China is the lack of credit records,” Felix Yang, Analyst from consultancy Kapronasia, wrote in a report. More than 900 million Chinese, or 65% of the population, have no credit records, compared to just 11% in the U.S., he said. “The development of a credit rating system in China has been slow. As a result, many players in consumer finance are running with few risk controls,” Yang wrote. “They may look fine while the market is growing, but when their business expands to a certain level, the accumulated risk will be a huge concern.”

As Bank of Beijing Consumer Finance, which has registered capital of CNY850 million, is not required to release annual figures, its financial situation cannot be fully assessed. However, Bank of Beijing – its biggest shareholder with a 35% stake – said in its 2016 annual report that it booked a loss of CNY476 million from its holdings in the consumer finance firm for the whole of last year. Spanish lender Banco Santander also holds a 20% stake.

Bank of Beijing Consumer Finance was once lauded as a model business in China. By providing collateral-free loans to pay for such things as home appliances and outbound travel it encouraged consumer spending, which is exactly what the government wanted as it sought to rebalance the economy away from fixed-asset investments, the South China Morning Post reports.