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China Announces Even Tighter Restrictions On Loan Growth

China Announces Even Tighter Restrictions On Loan Growth

Courtesy of Vincent Fernando at Clusterstock/Business Insider 

business insider on china

The China Banking Regulatory Commission (CBRC) issued a new post on their website Saturday explaining new regulations aimed at tightening both personal and working capital business loans.

China Daily:

Banks must set a lending quota after "prudent calculation" of borrowers’ "actual demand" and must not lend excessively,

Banks are also required to improve risk control after granting loans and to be aware of factors that might influence the repaying capabilities of borrowers through inspections and monitoring, the statement said.

For personal lending, the CBRC asked banks to be more sophisticated in the management of the lending process, especially on the use of the loans, according to the regulation.

Borrowers will not be able to obtain loans without declaration of a specific use, and they should meet bank representatives in person to avoid false claims, according to the CBRC.

These new regulations actually went in effect on February 12th, despite the Saturday web site release. It seems the regulator is trying to explain themselves further, or was just slow.

 


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