China's central bank and regulators encourage banks to increase lending

Tuesday 24 May 2022 14:17 CET | News

People's Bank of China and regulators have urged the nation’s lenders to step up support for the real economy and meet credit demand.

In a meeting with 24 financial institutions, the People's Bank of China (PBOC) and China's banking regulator urged lenders to ‘go all out to stabilise the fundamentals of the economy,’ the PBOC said in a statement.

The PBOC urged banks to fully utilise different policy tools and support ‘high-quality’ economic growth by increasing credit ‘appropriately’. It also asked banks to keep a steady increase of property loans, after a series of policy-easing recently to save the economy from a prolonged property slump.

The central bank listed sectors, including small business, green development, technology innovation, and energy supply as the key sectors that should receive financial support from banks. It also asked banks to roll over and postpone loan repayment for small business, truck drivers, and individuals hit hard by the pandemic, while accelerating loan issuance for businesses and individuals.

China's new loan growth collapsed in April 2022, with home mortgage loans contracting due to lockdowns of cities and stringent COVID-19 control measures that hindered loan issuance and damped credit demand. Several major economic indicators, including consumer spending and industrial production, fell sharply from April 2022, prompting investment banks to cut their forecasts.

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Keywords: central bank, lending, regulation, banks, COVID-19
Categories: Banking & Fintech
Countries: China
This article is part of category

Banking & Fintech