Policy bypass invites severe penalties
By Zhang Fengming |
July 14, 2010, Wednesday
|
Print Edition
Print Edition
SHANGHAI'S banking regulator said yesterday it will "severely punish" banks that bypass the tighter mortgage policy set by the central government to curb speculation in the real estate market.
No irregularities were found in a June inspection of four major banks in the city, the Shanghai bureau of the China Banking Regulatory Commission said yesterday in a statement.
It said it will carry out more inspections to ensure that the banks strictly adhere to the tight mortgage policy. It also said there have been fewer loans made for second or more homes in the city.
The regulator also urged banks to levy higher interest rates and down-payment requirement on mortgages for third or more homes although it did not specify the figures.
The State Council, or China's Cabinet, said in late April that the minimum down-payment on second-home mortgages should be raised from 40 percent to 50 percent. These second home loans should also attract an extra 10 percent interest rate.
For those who buy three or more homes, even higher requirements on both down-payments and interest rates should be levied.
Banks are also advised to suspend third home mortgages in cities where prices rise too rapidly or too high.
Individual mortgages grew the slowest in a year in June in Shanghai following the central government's curbs on housing speculation.
They increased 3.08 billion yuan (US$455 million) in June in the city, compared with 12.89 billion yuan a year ago, according to the Shanghai headquarters of the People's Bank of China, the central bank.
No irregularities were found in a June inspection of four major banks in the city, the Shanghai bureau of the China Banking Regulatory Commission said yesterday in a statement.
It said it will carry out more inspections to ensure that the banks strictly adhere to the tight mortgage policy. It also said there have been fewer loans made for second or more homes in the city.
The regulator also urged banks to levy higher interest rates and down-payment requirement on mortgages for third or more homes although it did not specify the figures.
The State Council, or China's Cabinet, said in late April that the minimum down-payment on second-home mortgages should be raised from 40 percent to 50 percent. These second home loans should also attract an extra 10 percent interest rate.
For those who buy three or more homes, even higher requirements on both down-payments and interest rates should be levied.
Banks are also advised to suspend third home mortgages in cities where prices rise too rapidly or too high.
Individual mortgages grew the slowest in a year in June in Shanghai following the central government's curbs on housing speculation.
They increased 3.08 billion yuan (US$455 million) in June in the city, compared with 12.89 billion yuan a year ago, according to the Shanghai headquarters of the People's Bank of China, the central bank.
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