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China orders banks to clear hurdles slowing private sector lending
[SHANGHAI] The China Banking Regulatory Commission has sent an urgent notice to local financial institutions telling them to investigate and clear bottlenecks slowing lending to the private sector, two sources with direct knowledge told Reuters.
The CBRC did not respond to calls seeking comment from Reuters.
According to the document seen by Reuters, the CBRC is requiring financial institutions to conduct checks on their implementation of central government directives intended to make it easier for private firms to access bank credit.
It also tells them to work to resolve any problems in cases where lending support to private enterprise is insufficient, including small and micro-businesses.
The document requires institutions to report their implementation results to the CBRC by May 20.
It also called for banks to reduce costs for short-term credit products such as bridge loans, which private firms rely on to stay afloat through tough business cycles, while examining risk in their loan guarantee businesses.
"The important part of the document is to implement State Council requests and notifications; the key points are areas where policy solutions have not been put into place, or measures have not been introduced, impacting private investment's stable and sustainable growth," said one source.