The State Administration of Financial Supervision Issues New Regulations to Improve Credit Management and Financial Services to the Real Economy
In an effort to enhance the quality and efficiency of financial services to the real economy, the State Administration of Financial Supervision has issued new regulations to further regulate loan management for banking financial institutions.
The “Interim Measures for the Management of Fixed Asset Loans” and “Interim Measures for the Management of Personal Loans” have been revised, along with the “Project Financing Business Guidelines” to form the “Fixed Asset Loan Management Measures”, “Working Capital Loan Management Measures” and “Personal Loan Management Measures”. These regulations are set to come into effect on July 1, 2024.
According to the State Administration of Financial Supervision, the revisions aim to better adapt to the current development trend of credit business, and to urge commercial banks to further improve the level of refinement and standardization of credit management.
The revisions broaden the purposes and scope of loan objects for fixed asset loans and working capital loans, with optimised calculation requirements and adjustments to entrusted payment amount standards. Additionally, the regulations incorporate the “Project Financing Business Management Regulations” into the “Fixed Asset Loan Management Measures” as a special chapter.
Many analytical institutions praised the revision for adapting to the actual credit business of commercial banks under the new situation and providing basic compliance for standardizing the operating behavior of commercial banks. The revisions are seen as more adaptable to the digital transformation of the banking industry, providing clearer guidance for bank operations and management in order to support the real economy more efficiently and accurately.
The new regulations also address specific term requirements for fixed assets, working capital, and personal business loans, improving the system design in preventing term mismatch risks and optimizing the amount and time limit standards for entrusted payments. This is expected to help the loan risk management of small and medium-sized banks, according to Cheng Shi, chief economist of ICBC International.
Overall, the issuance and implementation of the new regulations is seen as an important measure to improve the credit management system of banking financial institutions, which will help prevent financial risks and improve the quality and efficiency of financial services to the real economy.
The State Administration of Financial Supervision is now looking ahead to actively promote the healthy and orderly development of the credit business as the “Three Measures” come into effect.