Financial regulators told some Chinese banks to issue more loans to real estate companies for project development, said two bank sources with direct knowledge of the situation, in efforts to marginally ease liquidity strains in the industry.
The Chinese authorities have yet to give some sign that they will relax the “three red lines”, Financial requirements applied by the central bank last year that real estate developers must meet to obtain new bank loans.
But lenders recently adjusted their lending practices to reflect the latest central bank guidance from “meet normal financial needs”Of the sector.
The marginal relaxation of lending policies to real estate developers will continue to adhere to the fundamental principle that “houses are for living, not for speculation”Said two sources, one from a commercial bank in a city and the other from a large bank, who received guidance from regulators.
Financial regulators have told banks to specifically speed up the approval of loans to develop projects and to ensure that outstanding loans for project development show positive growth in their loan books in November compared to October, the companies said. two sources.
Both sources declined to be identified due to the sensitivity of the matter.
The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) did not immediately respond to requests for comment.
At the end of September, banks’ outstanding loans for the development of real estate projects amounted to 12.16 trillion yuan (US $ 1.91 trillion), 0.02% more than the previous year, central bank data showed.
Quarterly growth for these types of loans slowed further from the second quarter by 2.8 percentage points, the data showed.
The real estate sub-index of mainland China’s top-tier equities benchmark jumped nearly 5% on Friday following market rumors of a possible relaxation of home loan regulations. The sub-index closed 4% lower on Monday.
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