The proposed revisions by the China Banking and Insurance Regulatory Commission (CBIRC) cover rules managing fixed asset loans, working capital loans, personal loans and financing to project construction, according to a statement released on its website. The revisions are open to public review until Feb. 6, after which the regulator will publish a final version.
The revisions limit certain loan periods for the first time. Fixed asset loans in principle should not have a term longer than ten years, with no more than five years for personal consumption loans and no more than three years for working capital loans to businesses.
To curb the illegal use of personal business loans for the real estate sector, banks should note in loan contracts that they can respond by shortening repayment periods, reducing borrowers' credit lines or suspending loan issuance.
The draft rules aim to "further promote banking and financial institutions to enhance their credit management capacity and efficiency to offer financial services, to support finance serving the real economy," the CBIRC said.
The draft also said banks can use technologies such as big data to streamline the process of granting working capital loans to micro and small businesses.
(Reporting by Ziyi Tang and Ryan Woo; editing by Philippa Fletcher)
