CBRC to launch new rules to regulate credit flows

Apr. 17, 2009 (China Knowledge) - China Banking Regulatory Commission (CBRC) will soon launch new detailed rules to regulate flow of the country's soaring loans, according to industry insiders.

Considering domestic lenders' higher-than-expected credit amount in the first quarter of this year, the banking watchdog has drafted four new rules, namely the Administrative Measures on Floating Capital Loans, the Administrative Measures on Fixed Asset Loans, Administrative Measures on Personal Loans and the Guidance for Project Financing Business of Banks and Financial Institutions, to avoid embezzlement of credit funds and ensure the loans flow to the real economy, according to the sources.

Liu Mingkang, chairman of CBRC, said at a working conference on Wednesday that domestic lenders should reinforce risk management and keep close watch on threats resulted from lending.

Bank of China (BOC)<601988><3988> and China Construction Bank Corp (CCB)<601939><939> said they are tightening loan rules and enhancing scrutiny on the use of borrowings.

Chinese banks extended a record RMB 4.58 trillion of new loans in the first quarter, more than triple the amount granted a year earlier.