China Said to Probe Credit Loophole Used to Access Cash

China is probing a loophole that allowed executives at steel traders and other companies to bridge liquidity shortages for their firms by exceeding credit-card limits, according to three people familiar with the matter.

The People’s Bank of China opened an investigation into abuses of credit card pre-authorizations earlier this month, the people said, asking not to be identified because the probe hasn’t been made public. The probe is examining transactions in December and early January, and found that companies and people gained an aggregate of as much as 10 billion yuan ($1.6 billion) in that time.