THE national banking and insurance regulator has launched a nationwide bank inspection to determine if loans have been used illegally to fund property investment, to further clamp down on speculation in the country’s real estate market.

The checks will take be made at some commercial banks in 32 cities including Beijing, Shanghai and Shenzhen, as well as provincial capitals like Chengdu and Changchun, according to a notice issued by the China Banking and Insurance Regulatory Commission (CBIRC).

The CBIRC said the checks are meant to crack down on lending that has been redirected to the property market, and the inspections are aimed at fending off real estate and financial bubbles.

Consumer loans, personal credit cards and corporate loans illegally used to purchase properties will be the key target of the checks by local CBIRC branches, according to the notice.

Local CBIRC branches will also hunt down off-balance sheet investments by banks that ended up in real estate projects, the notice said.

Despite a cooling economy, average new home prices in China’s 70 major cities have risen for 50 straight months, the latest official data for June showed. Household debt has also risen rapidly.

With a focus on risks, China’s Politburo said in its latest meeting in late July that it will step up efforts to boost demand and support the economy, but explicitly said it would not use the property market as a form of short-term stimulus.(SD-Agencies)