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Since September last year, more than 50 staff at China Construction Bank (CCB), the mainland's number two lender, have been accused in four separate cases of embezzling about Rmb760m (US$92m) from the institution.
Some spent the money gambling in casinos in Macau and punting on soccer games in underground betting markets on the mainland, according to local press reports, while others salted it away.
The Chinese officials and investment bankers preparing CCB for a landmark initial public offering (IPO) overseas might have touted these cases as evidence that the bank's unruly periphery was being brought to heel.
But the fall of Zhang Enzhao, the bank's chairman, is evidence that CCB has deep-seated problems at the centre, among its top-level executives.
The allegations against Zhang have not been made public and could relate to his time as head of the bank's Shanghai branch in the 1980s and into the late 1990s.
His case will re-ignite fears that the large Chinese banks have problems that make them unfit for listing in the short-term. "The perception that problems only happen at the periphery because of junior officials' greed will be dispelled by this case. There are big problems in Beijing too," said a former adviser to one of the "Big Four" state-owned commercial banks.
With both CCB and the Bank of China preparing multi-billion dollar overseas listings, the crucial question is whether the flurry of alleged malpractice would deter foreign investors and potential strategic partners.
"It is a logical conclusion that the departure of the chairman amid allegations of misdemeanour will delay an IPO and perhaps lower its price," said an investment banker who has advised on several Chinese privatisations.
However, other observers argue that the departure of the CCB chairman well before the IPO is a sign of the improvements in the Chinese banks' internal controls and corporate governance.
"Anyone who is considering investing in a company such as this should expect to find this kind of stuff," says a Hong Kong-based lawyer who has worked on Chinese IPOs.
"The real question is whether the company has sufficient internal controls to identify and punish such behaviour."
Meanwhile, in recent comments on a separate corruption case at the Harbin branch of BoC, Guo Shuqing, a vice-governor of the People's Bank of China, the central bank, said: "The progress of reform has meant scandals are unable to hide anywhere."
However, the scandals have started to take on an unsettling familiarity.
Zhang's predecessor at CCB, Wang Xuebing, was sentenced to 12 years jail in late 2003 for offences committed while he was in charge of BoC from 1993 to 2000.
Zhu Xiaohua of China Everbright Bank, another state lender, and a number Wang's former colleagues in the BoC in Hong Kong and Shanghai, have all been imprisoned in the last two to three years on corruption charges.
As a result of the problems at CCB and BoC, the two banks might find it even more difficult to list at their planned valuations and raise the desired amount of funds -- US$10bn for CCB and US$4.0bn for BoC.
"Selling these two was difficult before the scandals. After these problems it is inconceivable that investors will not demand a discount," said one banker.
Liu Mingkang, the head of the China Bank Regulatory Commission, has made it clear for many months that it was more important for the two lenders to be properly restructured rather then rush their IPOs. In an interview with the Financial Times last year, Liu said he had told the two banks "to keep your house clean and finish your homework".
The CBRC followed up Liu's stricture with an official notice last month in the wake of the Harbin scandal ordering banks to tighten risk controls and "to be aware of irregular activities". The notice said the biggest banks were neither investigating problems thoroughly enough, nor punishing miscreants severely enough. Whistleblowers within banks, it added, should be rewarded.
If bankers did not heed Liu's warning, then Zhang's fall should make them sit up and take notice.
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