China's three departments join forces to upgrade supervision to prevent illegal business loans from flowing into the property market
China News Service, Beijing, March 26 (Reporter Wang Enbo) In response to the current phenomenon of illegal misappropriation of loans for business purposes in the real estate sector, China's three agencies joined forces on the 26th to upgrade regulatory measures and require strict prevention.
Data map: Aerial photography of a real estate in Yuhuatai District, Nanjing.
Photo by China News Agency reporter Yang Bo
On the same day, the "Notice on Preventing Illegal Flow of Loans for Business Purposes into the Real Estate Sector" jointly issued by the General Office of the China Banking and Insurance Regulatory Commission, the General Office of the Ministry of Housing and Urban-Rural Development, and the General Office of the People's Bank of China was announced.
Relevant persons in charge of the three departments said that recently some companies and individuals have violated regulations and invested business loans in the real estate sector. The problem is prominent, affecting the effect of real estate control policies and squeezing credit resources to support the development of the real economy, especially small and micro enterprises.
In response to this phenomenon, the "Notice" urges banking financial institutions in terms of strengthening the verification of borrowers’ qualifications, strengthening credit demand review, strengthening loan term management, strengthening loan collateral management, strengthening post-loan management during loans, and strengthening internal management of banks. Further strengthen prudent and compliance operations, and strictly prevent the illegal flow of loans for business purposes into the real estate sector.
At the same time, it is required to further strengthen the management of intermediary agencies, establish a "blacklist" of violations, increase penalties and accountability and make regular disclosures.
Specifically, the government requires a penetrating and substantive review of the demand for loans for business purposes, and no business loans should be issued to companies whose capital flow does not clearly match their business conditions.
Focus on reviewing the rationality of financing requirements for operating loans in the short term after the completion of the real estate transaction.
At the same time, it is necessary to strengthen post-loan fund flow monitoring and early warning.
It is necessary to sign a letter of commitment for the use of funds with the borrower, clarifying that once the loan is found to be embezzled in the real estate sector, the loan shall be recovered immediately, the credit line shall be reduced, and the corresponding legal responsibility shall be pursued.
Talking about whether this will affect the reasonable financing of enterprises and individuals, the above-mentioned person in charge said that at present, some business loans are illegally embezzled in the real estate field, squeezing the credit resources of the real economy to a certain extent.
The "Notice" strictly controls such violations, will release more credit resources to serve the development of the real economy, and promote a virtuous cycle of finance and the real economy.
It is reported that the relevant departments will intensify the supervision and inspection of the illegal inflow of business loans into real estate in the future, and the relevant administrative penalty information on illegal misappropriation of business loans by enterprises and individuals will be incorporated into the credit investigation system in a timely manner.
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