Notification of the PBOC and the CBRC on Improving Financial Services to Underpin the Affordable Housing Projects

 

Shanghai headquarters, all the local branches, operations offices, and provisional sub-branches of the PBOC; all the provincial offices of the CBRC; China Development Bank, policy banks, the state-owned commercial banks, the joint-stock commercial banks and the Postal Savings Bank of China:

 

To ensure financial services for the affordable housing projects including the public rental housing project, and to carry out  the Notice of the State Council on Matters Regulating the Property Market, the CBRC hereby issued a notice on the following items:  

 

I. In line with the credit risk management requirements, banks should directly extend loans to government-invested public rental housing projects that are under sound commercialized operation and have sufficient cash to repay principle and interest.

 

II. For the projects not belonging to the category above, the banking institutions can offer support in accordance with the following requirements:

 

1. As for public rental housing projects invested by the municipalities directly under the central government, cities specifically designated in the state plan and provincial capitals, the financial institutions can release loans under the pre-requisition that those projects not only comply with the Notice of the State Council on Matters Relating to Strengthening the Management of Local Government Funding Platforms (No.9 2010, the state council), but also enjoy adequate capital and sound operation so that their operational revenue can cover the credit and interests. If the LGFPs fail to repay the loans and interest, the local governments should shoulder the responsibility and make proper solutions. Loans supporting public rental housing projects will be disbursed to only one LGFP within each city.    

 

2. Loans can be extended to public rental housing projects funded by the government of municipal cities, under the condition that those projects have passed the assessment and review of the headquarters of the banking institutions and have the ability to service the debt. As for the county-level projects, after ensuring the sources of repayment, the provincial government can designate a provincial-level funding platform to borrow money on the county governments’ behalf and make duly repayment.

 

III. The public rental housing projects invested by the governments should be subjected to the minimum capital ratio set out by the central government. Lending rate is calculated according to the PBOC policy on loans, and banks can at most offer a 10 percent discount on benchmark interest rate. In principle, the term is no more than 15 years. Upon completion of each project, loans should be paid back semi-annually, with principle and interest. The financial institutions are encouraged to make syndicated loans for such projects.

 

IV. Banking institutions are allowed to extend commercial loans to non-government agencies which engage in the projects that have been included into the government’s overall planning of programs.  

 

V. Should the leasing relationship of the public rental housing project be altered, the money acquired should be used to pay the loans in the first place. 

 

VI. Loans for other projects included in the affordable housing projects such as subsidized and low-rent public housing, and renovation of shanty towns, are subject to the policies jointly released by the PBOC and the CBRC, i.e. Regulation on Loans Granted to Government Subsidized Housing Developers ( No.13 2008, the PBOC),  Regulation on Loans Granted to Low-rent Public Housing Constructions( No. 355, 2008, the PBOC), and the Notice of the PBOC and the CBRC on Matters Relating to Backing the Renovation of Run-down Areas in Cities and State-owned Mining Residential Areas( No. 37, 2010, the PBOC). The banking institutions should enhance risk management while increasing support to these projects.  

 

VII. The banking institutions should set up and improve measures to manage loans granted to the public housing projects. The LGFPs undertaking the projects should be clearly listed. The banking institutions should be ready to make decisions independently and assume risks by their own. Measures should be taken to ensure that loans are put to designated use.  

 

VIII. The banking institutions should improve the statistics information system and dynamically track project approval, project kick-off, investment paid-in, construction, and how the loans are being used. For those projects that failed to meet the loan-granting requirement, banks should make thorough analysis one by on and offer viable solutions. Related information should be reported to the local PBOC branches and the CBRC offices.

 

IX. The local offices of both the POBC and the CBRC should pay close attention to the progress of the public housing projects, disclose the information of projects under construction or newly started to the banking institutions in proper approaches, dynamically monitor loan disbursement to public housing projects, and report the problems encountered by the banking institutions to related authorities in a timely manner.

 

Shanghai headquarters, all the local branches, operations offices, and provisional sub-branches of the PBOC; all the provincial offices of the CBRC; China Development Bank, policy banks, the state-owned commercial banks, joint-stock commercial banks and the Postal Savings Bank of China shall forward this Notice to all subsidiary branches and all city commercial banks, rural commercial banks, rural cooperative banks, urban credit cooperatives, rural credit cooperatives and foreign banks.

 

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Copyright: China Banking Regulatory Commission
ADDR:Jia N0.15 Financial Street, Xicheng District, Beijing, 100033