• Fri. Dec 8th, 2023

Housing Finance Bank

Housing Finance Bank, The Real Thing

Banking regulator vows to settle rural banking malfeasance in Henan, Anhui

China Banking and Insurance Regulatory Commission Photo: VCG

China Banking and Insurance Regulatory Commission Photo: VCG

China’s banking regulator said on Thursday that relevant work regarding some village banks, in which depositors found that they could not withdraw their cash, is making steady progress. 

After the incident of the five rural banks in Central China’s Henan Province and East China’s Anhui Province, the banking regulator stated multiple times that it would strictly abide by laws and regulations, take facts as the basis and take the law as the criterion for handling the issue, the China Banking and Insurance Regulatory Commission (CBIRC) said on Thursday.

The comments came during a press conference to explain the development of the banking and insurance industries in the first half of 2022.

Four rural banks in Henan and one in Anhui were recently in the spotlight, with depositors finding that they could not withdraw their expired savings, starting from April 18 this year. 

An initial police probe on June 18 indicated a scam was behind the case.

The CBIRC noted that the local financial regulators in Henan and Anhui will start the second round of advance payments for depositors, who have reported difficulty in withdrawing money from local village banks, from July 25.

The clients in this second round of advance payments will be customers initially with combined deposits in the related banks of no more than 100,000 yuan (14,788) apiece, according to announcements by the Henan Office and Anhui Office of the CBIRC on Thursday.

The first round of the returned funds targeted those with deposits totaling 50,000 yuan or less in a single bank, starting from July 15.

In terms of the proportion of depositors with assets under 100,000 yuan out of all bank clients, Qi Xiang, spokesperson and director of Regulation Department of the CBIRC, said on Thursday at the press conference that in order to ensure the authenticity of information, the two provinces have set up a new customer information registration system, and are doing customer registration work.

The spokesperson said that the banking and insurance industries performed steadily in the first half of the year, and the ability to fend off financial risks continued to improve.

Banks have played an important role in the housing sector for both property developers and homebuyers.

In June, real estate loans increased by 200.3 billion yuan, and the overall operation of real estate credit was stable, according to the CBIRC.

The regulator will work with the People’s Bank of China, the central bank, to lower the floor of interest rates on first-time home loans by 20 basis points and guide banks to speed up mortgage loan approval, which has reached the fastest pace since 2019, CBIRC said.

“We will optimize housing finance services. More than 90 percent of mortgages are for buyers of first homes,” Liu Zhongrui, head of the Statistical Information and Risk Monitoring Department of the CBIRC, said on Thursday.

Qi also noted that the CBIRC will adhere to the principle that “houses are for living, not for speculation,” implement differentiated housing credit policies for each city, and prudently defuse risks in the real estate sector.

“The CBIRC attached great importance to the guarantee of house deliveries. We have stepped up coordination with relevant departments to support local governments in their efforts to ensure housing deliveries, people’s wellbeing and stability,” said Liu.

Liu noted that the regulator will encourage banks to actively study the plan to solve the funding gap, do a good job in providing credit, and assist in promoting the quick resumption of construction and early delivery of housing.

Guaranteeing the delivery of housing is a top priority, which will be the work focus of local governments in the second half of the year, a Guangzhou-based veteran industry observer surnamed Zhao told the Global Times on Thursday.

“The core of house delivery is to guarantee the interests of homebuyers. Banks could roll over mortgage loans until the projects are completed or construction actually resumes, which may be what financial regulators are trying to say,” Zhao said.

Tian Yun, a Beijing-based veteran macroeconomic analyst, told the Global Times that the improvement of the real estate industry is important for the recovery of investment and consumption, which will be the driving forces of economic growth in the second half of the year.

Tian said that the deterioration in the housing industry in the second quarter “must be reversed as soon as possible” so that property developers will not pass on bad debts to buyers because of unfinished, stalled housing projects.

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