China’s banking regulators ordered financial institutions on Monday to stop extending loans to projects that run afoul of the country’s policies of energy conservation, cutting emissions and eliminating outdated capacities, South China Morning Post reported. The China Banking Regulatory Commission asked banks to inspect loans to industries plagued by overcapacity or pollution problems, setting a deadline for lenders to submit inspection results by the end of this month. The inspections are being conducted to ensure loans support Beijing’s efforts to shift its economic development model from relying on polluting industries, to more environmentally friendly sectors. The CBRC also asked commercial banks to withdraw loan-granting authority from branches and sub-branches. Banks are also being instructed to enhance financial support for major pollution source control projects, in addition to energy-saving and emission-cutting initiatives, state media reported.
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