China Regulates Housing Financial BusinessesThe People's Bank of China, the country's central bank, issued a circular Tuesday on the regulation of housing financial businesses.A spokesman for the central bank said that the circular aims to rectify housing financing market order, standardize housing financial businesses and minimize housing loan risks, so as to boost the development of housing finance. The circular demands that all commercial banks strictly examine related conditions for real estate development loans. Borrowers of such loans should be qualified developers with good credit record and the loans should be put into housing development projects with good market prospects. In addition, the developers' self-owned capital should be no less than 30 percent of the total investment in the projects. When granting mortgage loans to individuals, the actual value of the pledged assets should be strictly evaluated, the proportion of the loan to the pledged assets should be no higher than 80 percent, and zero down payment is forbidden for individual housing loan. The circular also calls on commercial banks to further improve housing financial services. Efforts should be made to expand new credit businesses while minimizing credit risks, it says. |
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