THE country’s financial regulator has told banks to “significantly cut” lending rates for small firms in the third quarter of the year in comparison with the first quarter, sources with direct knowledge of the matter have said. The move comes amid a Chinese deleveraging campaign to crack down on financial risks and economic uncertainty triggered by a trade war with the United States. In a non-public notice issued by the China Banking and Insurance Regulatory Commission (CBIRC) in late June, the regulator also asked banks to increase real-time monitoring of lending rates, the sources said. The central bank does not disclose lending rates for small businesses. The weighted average lending rate for the non-financial corporate sector was 5.96 percent in March, according to the latest monetary policy report. Recent official surveys show that tight funding has hit smaller manufacturers. During high-level government meetings, Premier Li Keqiang has repeatedly urged that banks effectively lower financing costs, especially for small businesses and the agricultural sector. In the June notice, Chinese banks were also told to keep asset quality and overall costs of their small business lending at a reasonable level, said the sources. The CBIRC has asked its branches nationwide to strengthen regulatory review to examine the progress made by banks, the sources said. (SD-Agencies) |