The Study On Civil Liability Of Commercial Banks For Violating Suitability Obligation

There is a lack of civil liability in the provisions governing suitability obligation in China.However,with the number of civil disputes caused by improper sales of financial products by commercial banks spiraling progressively,controversies arise on whether banks shall bear civil liability and how to bear them correspondingly.In judicial practice,it is generally believed that banks shall bear civil liability for breach of suitability obligation,but there are some problems with the determination of civil liability,such as the unclear standards of the determination of breach of statutory obligation and the inconsistent standards of the application of the nature of civil liability and the scope of damages.The suitability obligation shall be regarded as statutory obligation from civil law principles,under which the bank and the customer respectively constitute the trust financing relationship and financial service legal relationship,therefore the bank shall bear the corresponding civil liability.The court’s determination of the bank’s breach of the suitability obligation shall be made both from its active conduct in promoting inappropriate products and failing to fully inform the financial consumers of the information about financial products.The bank shall not bear civil liability for losses caused by customers intentionally informing them of false information or voluntarily purchasing high-risk products.In contrast,the bank shall bear the contract default liability or tort liability if it violates the suitability obligation.In terms of the scope of damage compensation,the bank should bear all the principal losses,and the financial consumers shall bear the interest loss by themselves due to minor fault.