Financial and business news from Bulgaria

China's government tightens control over business loans to intercept their leakage into property market

Chinese authorities on Friday announced measures to tighten controls on banks' business loans to prevent their unregulated leakage into the property market. This was reported by Radio China.
They require banks to be tougher when checking recipients with such loans. For example, businesses that have no real business will be entitled to lending, and new firms that have been set up or have been granted equity rights for less than a year, as well as borrowers who own mortgaged property for less than a year, will be subject to more rigorous review. Banks also need to step up their study of business loan objectives, especially for legal entities and individuals who applied shortly after entering into real estate transactions.

Business loans will be terminated immediately if it is found to have been used on the property market and offenders will be restricted in future to receive new financed, and in some cases may also be subject to more serious legal penalties.

Local authorities should monitor the illegal inflow of business loans into the property market before the end of May and make greater efforts to remedy and punish irregularities, government measures also provide.