China News Service, April 3. According to news from the website of the People's Bank of China on the 3rd, in order to implement the decisions and arrangements of the Party Central Committee and the State Council and promote the trade-in of old cars for new ones, the People's Bank of China and the State Financial Supervision Administration jointly issued the "About Adjustments to Auto Loans" Notice of the Policy" (hereinafter referred to as the "Notice") clarifies that financial institutions, on the premise of compliance with laws and regulations and controllable risks, can independently determine the maximum loan disbursement for self-use traditional power vehicles and self-use new energy vehicles based on the borrower's credit status, repayment ability, etc. Proportion. Financial institutions are encouraged to strengthen innovation in financial products and services based on segmented scenarios such as car trade-in, and appropriately reduce or exempt liquidated damages arising from early settlement of loans during the car trade-in process.
In the next step, the People's Bank of China and the State Financial Supervision and Administration Bureau will guide financial institutions to implement the requirements of the "Notice", increase financial support, and better support reasonable automobile consumption needs.
The full text of the Notice is as follows:
Notice of the People's Bank of China and the State Administration of Financial Supervision on Adjusting Policies Related to Auto Loans
The Shanghai headquarters of the People's Bank of China, branches in all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning; all supervisory bureaus of the State Financial Supervision and Administration Bureau; state-owned commercial banks of various countries, Postal Savings Bank of China, and all joint-stock commercial banks:
In order to implement the decisions and arrangements of the Party Central Committee and the State Council, increase financial support for automobile consumption, promote the trade-in of old automobiles for new ones, and stabilize and expand automobile consumption, the following matters regarding automobile loan policies are hereby notified:
1. The maximum loan issuance ratio for self-use traditional power vehicles and self-use new energy vehicles is determined independently by financial institutions; the maximum issuance ratio for commercial traditional power vehicle loans is 70%, and the maximum issuance ratio for commercial new energy vehicle loans is 75%; the maximum issuance ratio for second-hand car loans is The ratio is 70%.
Among them, for the scope of vehicle models that implement new energy vehicle loan policies, financial institutions can, on the basis of the provisions of the "Automobile Loan Management Measures" (issued by the People's Bank of China and the China Banking Regulatory Commission Order [2017] No. 2), on a voluntary basis. The principles of prudence and risk control shall be implemented with reference to the "Catalogue of Recommended Models for the Promotion and Application of New Energy Vehicles" issued by the Ministry of Industry and Information Technology.
2. Encourage financial institutions to combine new cars, second-hand cars, car trade-in and other sub-scenarios, strengthen financial product and service innovation, appropriately reduce and exempt liquidated damages caused by early settlement of loans during the car trade-in process, and better support reasonable car consumption demand.
3. Under the premise of compliance with laws and regulations and controllable risks, each financial institution shall reasonably determine the specific proportion and period of auto loan disbursement based on the institution's auto loan policy, risk prevention and control and other factors, and based on the borrower's credit status, repayment ability, etc. and interest rates; effectively strengthen the full-process management of auto loans, strengthen pre-loan review and post-loan management, continue to improve the borrower's credit risk assessment system and collateral value assessment system, ensure the safety of loan assets, and strictly prevent loan funds from being used for other purposes.
4. All branches of the People's Bank of China and all dispatched offices of the State Administration of Financial Supervision should strengthen the monitoring, analysis and evaluation of auto loan asset quality and institutional soundness, and promote the stable operation of the auto loan business of financial institutions. All financial institutions that encounter major situations and problems in specific business should promptly report them to the People's Bank of China and its branches, the State Administration of Financial Supervision and its dispatched offices.
The financial institutions mentioned in this notice refer to commercial banks, rural cooperative banks, rural credit cooperatives and non-bank financial institutions that are legally established within the territory of the People's Republic of China and approved by the State Administration of Financial Supervision to operate RMB loan business.
5. This notice shall come into effect from the date of issuance. The "Notice of the People's Bank of China and the China Banking Regulatory Commission on Adjusting Policies Related to Auto Loans" (Yinfa [2017] No. 234) is abolished at the same time.
People's Bank of China
State Financial Supervision and Administration Bureau
March 28, 2024