Policy and Regulation

Regulator asks banks to cut loans to developers

By Song Jingli (chinadaily.com.cn)
Updated: 2011-06-24 14:56

The China Banking Regulatory Commission has asked banks to reduce loans to real estate developers, the Beijing News reported on June 24, citing head of the Shanghai Banking Regulatory Bureau, Liao Min.

Related readings:  Growth of new loans expected to be steady  New loans in 2011 estimated at 7.1 to 8.1t yuan

This is the first time the regulator has openly said it would ask banks to do so, according to the Beijing News report.

The banking regulator has asked banks to conduct strict due diligence survey when developers apply for loans, to cut risks.

A quarter of the 7.95 trillion yuan（$1.23 trillion） in newly-added loans in 2010 went to the real estate sector, the Beijing News reported, citing data from the People's Bank of China, the country's central bank.