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Tianjin regulator warns about illegal property sector loans
Published on: 2021-06-04
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China’s banking regulator has warned the country’s smaller banks against rushing to grow their property sector loans after a cap on lending by big banks to the highly leveraged industry showed some initial success.

The China Banking and Insurance Regulatory Commission (CBIRC) will pay close attention to growth in property sector loans, and it will identify and closely monitor banks with a high proportion of such lending in their portfolios, Liu Zhongrui, a deputy director of CBIRC’s statistical information and risk surveillance department, said on Tuesday.

The country's top banking and insurance regulator, together with the Ministry of Housing and Urban-Rural Development and the People's Bank of China, took measures to prevent business loans from flowing into the real estate sector by requiring banks to strengthen borrower qualification verification, credit demand verification and the administration of intermediaries.

The Tianjin Banking and Insurance Regulatory Bureau also issued a risk alert and complaint hotline for illegal inflow of business loans into the real estate sector, emphasizing that business loans and other credit funds should not be used for house purchase.

Borrowers who have used business loans for other purposes will be reported to China's credit reporting system. Their lines of credit will also be lowered and business loans will be recovered.

Property lending portfolio of lenders increased by 10.5 percent on a yearly basis by the end of April, with the growth rate hitting an eight-year low.



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