China News Agency, Beijing, November 14th (Reporter Wang Enbo) The "Notice on the Relevant Work of Commercial Banks Issuing Letters of Guarantee to Replace Pre-sale Supervision Funds" jointly issued by the China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development of China, and the People's Bank of China was announced on the 14th. .
The three departments will guide commercial banks to issue letters of guarantee to high-quality real estate companies to replace pre-sale supervision funds in accordance with the principles of marketization and rule of law.
The "Notice" pointed out that after the funds in the supervision account reach the supervision limit stipulated by the housing and urban-rural development department, real estate enterprises can apply to commercial banks to issue a letter of guarantee to replace the funds within the supervision limit.
Commercial banks may, in accordance with the principles of marketization and the rule of law, make independent decisions on the basis of fully evaluating the credit risk, financial status, and reputation risk of real estate enterprises, and carry out the business of replacing pre-sale supervision funds with high-quality real estate enterprises.
According to official requirements, the letter of guarantee can only be used to replace the funds within the supervision limit of the pre-sale funds supervision account established in accordance with laws and regulations.
The replacement amount shall not exceed 30% of the funds required to ensure the completion and delivery of the project in the supervision account, and the supervision funds after the replacement shall not be less than 70% of the funds required to ensure the completion and delivery of the project in the supervision account.
The "Notice" also draws a red line: commercial banks with a regulatory rating of 4 or below or with an asset size of less than 500 billion yuan are not allowed to carry out the business of pre-sale of regulatory funds for letter of guarantee replacement.
A commercial bank shall not issue a letter of guarantee to a real estate enterprise that is the main shareholder, controlling shareholder or related party of the bank to replace the pre-sale supervision funds.
Non-bank financial institutions such as enterprise group finance companies are not allowed to issue letters of guarantee to replace pre-sale supervision funds.
The three departments emphasized that real estate companies should use the pre-sale supervision funds replaced by letters of guarantee as required, and give priority to project construction, repayment of project debts due, and not to purchase land, increase other investments, and repay shareholder loans.
Real estate enterprises should undertake the obligation of replenishing funds in the supervision account as agreed to ensure sufficient funds for project construction.
Officials said that the release and implementation of the "Notice" will help high-quality real estate companies ease liquidity pressure, stabilize real estate market expectations, and promote the stable and healthy development of the real estate market.
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