Chinese regulators are urging banks to accelerate the approval of new loans for cash-strapped private property developers to boost homebuyer sentiment, Reuters reported on Monday.
This move aims to address the liquidity crunch in the sector and stimulate home purchases amid falling prices.
Despite previous reluctance from major banks to increase credit exposure to the troubled property sector, the regulators are now pushing for faster loan approvals under the “whitelist” mechanism.
This initiative, effective since last week, targets residential projects in need of fresh financing, totaling 1.5 trillion yuan.
The directive requires banks to complete the approval and issuance of all loans by the end of June, emphasising equal treatment for projects backed by private and state-owned developers.
This push comes as the property sector in China has faced challenges due to regulatory measures and liquidity issues since 2021.
While banks are cautious about potential risks associated with property loans, they are compelled to comply with the regulator’s instructions.
The “whitelist” programme, introduced in January, allows city governments to recommend viable residential projects to banks for financial support, aiming to address the sector’s liquidity constraints and support project development.
