Three central government ministries jointly launched a sweeping clampdown on illicit borrowing for property speculation, expanding efforts made by several local regulators to contain risks in the white-hot housing market, reported Caixin.
The China Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development and the People’s Bank of China issued a joint statement Friday announcing a nationwide inspection of business loans, targeting borrowers illicitly using individual or corporate business loans to speculate in the housing market.
Speculators have increasingly exploited business loans originally designed to support small and midsize enterprises to fund property purchases, seeking profits amid a recent surge of housing prices in big Chinese cities as pent-up demand was released in the wake of the domestic Covid-19 epidemic, reported Caixin.
The banking regulator in Beijing said Tuesday that it had launched investigations on four banks on alleged misconduct following an inspection launched in the second half 2020 found RMB 340 million ($52 million) of individual business loans extended by local banks were misused for property speculation.
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