SHANGHAI/BEIJING (Reuters) - The banking regulator in Shanghai, China’s commercial capital, has told commercial banks to “strictly control” acquisition loans for financing property development projects, two sources with direct knowledge of the matter told Reuters on Wednesday.
In an internal notice dated Jan. 29, the regulator said real estate development projects must reach a more than 25 percent completion stage before an acquisition loan is granted, according to the sources who have seen the document.
Reuters could not immediately reach the Shanghai office of the China Banking Regulatory Commission (CBRC) for comment.
The move is the latest in a series of measures by the Shanghai government to strengthen its regulation of the city’s property market, and reflects China’s broad efforts to curtail real estate speculation.
Shanghai Mayor Ying Yong said on Monday that the government would continue targeting speculation and soaring prices, echoing remarks by China’s President Xi Jinping last year.
“We must adhere to the position that houses are for living, not for speculation, and stick to the view that the strict control of high house and land prices is not a stopgap measure,” Ying said.
Commercial banks that fail to strictly enforce the acquisition loan rules will be suspended from associated business and face fines, the Shanghai banking regulator said, according to the sources.
The Shanghai CBRC has also prohibited banks from providing any sort of loans to property projects without sufficient certificates, the sources said.
Reporting By Li Zheng and Beijing Newsroom; Writing by Shu Zhang; Editing by Shri Navaratnam