Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/sp/article/2008/200811/20081119/article_381172.htm
Strict policy reminder to banks
Created: 2008-11-19 1:08:07
Author:Zhang Fengming
SHANGHAI'S banking regulator yesterday urged banks to ensure that they strictly implement the tight second-home mortgage policy and that they should also enhance their risk management.
The Shanghai Bureau of the China Banking Regulatory Commission urged commercial banks to monitor strictly the granting of credit to first-home buyers and second-home buyers. Banks are asked to strengthen risk control on individual mortgages while supporting buyers who buy homes for their own living rather than buying to make a quick profit.
The People's Bank of China, the central bank, has allowed lenders to cut the minimum down payment to 20 percent from 30 percent since October 27. A maximum discount of 30 percent on the benchmark rate has also been doubled from 15 percent.
However, the central bank didn't make it clear exactly what type of mortgage applicants can enjoy the new preferential lending rate and the down payment.
The CBRC said the preferential policy only applies to first home buyers.
Second-home buyers face a minimum down payment of 40 percent of the total value, with interest rate at least 10 percent more than the benchmark rates, as stated in a joint statement by the central bank and regulator in September 2007.
Banks such as the Bank of Communications have already said they will only offer the preferential policy to first-home buyers.
Commercial banks in Shanghai are also asked to grant loans to buyers of affordable properties, help real estate developers with their credit needs and boost the stable and healthy development of the real estate market.
The local banking watchdog said banks should differentiate, such as giving credit support to qualified developers with prospects. They are also advised to be fully aware of risks from the credit crunch and to make full provision against bad loans and write off sour assets.
The Shanghai Bureau of the China Banking Regulatory Commission urged commercial banks to monitor strictly the granting of credit to first-home buyers and second-home buyers. Banks are asked to strengthen risk control on individual mortgages while supporting buyers who buy homes for their own living rather than buying to make a quick profit.
The People's Bank of China, the central bank, has allowed lenders to cut the minimum down payment to 20 percent from 30 percent since October 27. A maximum discount of 30 percent on the benchmark rate has also been doubled from 15 percent.
However, the central bank didn't make it clear exactly what type of mortgage applicants can enjoy the new preferential lending rate and the down payment.
The CBRC said the preferential policy only applies to first home buyers.
Second-home buyers face a minimum down payment of 40 percent of the total value, with interest rate at least 10 percent more than the benchmark rates, as stated in a joint statement by the central bank and regulator in September 2007.
Banks such as the Bank of Communications have already said they will only offer the preferential policy to first-home buyers.
Commercial banks in Shanghai are also asked to grant loans to buyers of affordable properties, help real estate developers with their credit needs and boost the stable and healthy development of the real estate market.
The local banking watchdog said banks should differentiate, such as giving credit support to qualified developers with prospects. They are also advised to be fully aware of risks from the credit crunch and to make full provision against bad loans and write off sour assets.
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