The People’s Bank of China issued a notice on Dec. 31 to require all banks to cap the ratio of their outstanding property loans as a proportion of total loans, and the ratio of outstanding mortgages to total loans.
The required ratios vary depending on each bank’s asset size and operations as the PBOC grouped them into five categories. For China’s big four banks, along with China Development Bank, Bank of Communications and Postal Savings Bank of China, the ratio of outstanding property loans to total loans will be capped at 40%, and outstanding mortgages as a proportion of total loans will be capped at 32.5%. For the smaller banks, the ratios will be lower.
Banks that do not meet the requirements will be granted a grace period of two to four years to rectify.A woman wearing a face mask following the coronavirus disease outbreak walks past a residential compound in Beijing, China August 11, 2020. Picture taken August 11, 2020.
ReutersBiz ywchen1 Nothing new sir, China has been collapsing for more than70 years.