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Chinese Bank Launches Circulating Working Capital Loan Business
The Industrial and Commercial Bank of China (ICBC) announced Monday that it will start a circulating loan business to provide working capital for corporate clients, which is believed to be the first such business in China.
A spokesman for the ICBC said the new business has been worked out to meet quality clients' frequent demands for working capital, raise the efficiency of credit capital, rationalize credit structure and improve financial service quality.
Previously clients were required to submit applications every time they wanted to borrow money from the bank, while the new business enables clients to draw loans repeatedly and use the loan in a circulating way.
The spokesman said that to effectively prevent credit risks, such loans will be used only to meet the working capital demands by quality clients' productive and commercial activities, the credit capital is not allowed for investment in securities, futures or equities.
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