BEIJING- China's banking watchdog has penalized 49 staff members of 11 banking institutions who were responsible for funding an unauthorized power plant that has been criticized by the central government.

Nine banks and two financing firms for power companies were responsible for slack examination procedures before approving the credit and for poor management of the loans to the north China-based Inner Mongolia Power Group Co., Ltd., which constructed the plant and other six illegal power projects, said the China Banking Regulatory Commission.

Related readings: Hopes and concerns for new postal bank China to revamp 4th bank in preparation for offering Agricultural bank 'all set for reform' China dismisses 243 senior bank managers last year Rethinking financial role of Central Huijin Top leaders urge greater financial reform CPC calls for all-around financial reforms Financial policies set at meet Financial reform 'Meaningful for establishment of competitive financial system' Top-level conference on financial reform path

The disgraced institutions include the country's "big four" state-owned lenders -- the China Construction Bank, the Bank of China, the Agricultural Bank of China and the Industrial and Commercial Bank of China.The commission did not reveal the specific penalties.

The project, the Xinfeng thermal power plant, came under fire in August last year, when it was openly criticized by the State Council, China's cabinet.

Six people died and eight were injured in the construction of plant, and the power company had failed to follow standard procedures in project approval, land acquisition and tendering, said the State Council.

Regional authorities received disciplinary and judicial penalties for failing to stop the project and enforce the central government's macro-control policies aimed at curbing investment to prevent the economy from overheating. The commission, together with the National Development and Reform Commission and the National Audit Office, reinvestigated the legitimacy and management of all bank loans to the power company from September 18 to 27.

The country's banking institutions must learn from the case and resolutely implement central macro-control policies, said the commission. It urged all financial institutions to strengthen risk management of large corporate customers and strictly examine the legitimacy of their credit.