After regulators in Shenzhen, Guangzhou, Beijing and other places announced the investigation results of illegal lending into the property market, the Shanghai Banking and Insurance Regulatory Bureau on April 7, the first time announced the results of the periodic investigation. Not long ago, the Banking and Insurance Regulatory Commission, the Ministry of Housing and Urban-Rural Development, and the People’s Bank of China (PBOC) jointly issued a document requiring all banking and insurance regulatory bureaus, local housing and urban-rural development departments, and branches of the People’s Bank of China to jointly complete the investigation before May 31.
China Business Daily reporter learned from the Shanghai Banking and Insurance Regulatory Bureau, the Shanghai Banking and Insurance Regulatory Bureau recently carried out a special investigation on more than 10 of its banks operating loans, consumer loans illegally into the property market. So far, the investigation has found that 123 business and consumer loans, totaling 339 million yuan, were allegedly misappropriated from the real estate market.
In fact, in the middle of March, 135 commercial banks in the Shanghai area have completed the personal housing credit management special self-inspection work. The problems found in the self-inspection include illegal use of loans, lending loans to houses with uncapped main structures, unscrupulous verification of down payment funds, and incomplete collection of post-loan data.
Last year, due to the large margin between business loans and mortgage loans, property buyers illegally misappropriated business loans, which promoted a new wave of “rising prices” in the property market in Shanghai and other places. And in the small and micro enterprise loan growth rate of large cities, Shanghai is the most typical. New loans in Shanghai increased by 674.16 billion yuan, of which small and micro loans of Pratt & Whitney increased by 152.53 billion yuan, up 41.5% year on year.
In order to trace the origin and effectively regulate the local property market, Shanghai Banking and Insurance Regulatory Commission issued the Notice on Further Strengthening the Management of Personal Housing Credit at the beginning of 2021, requiring all commercial banks to conduct a comprehensive self-examination on their operating loans issued since June 2020.
In addition to requiring banks to conduct self-examination, the Shanghai Banking and Insurance Regulatory Commission began a special audit investigation on 16 of its banks on March 1. The investigation results show that in addition to illegal inflows into the real estate market, there are also some banks first apartment identification is not accurate, the data filling is not standard and the external “lending” institutions illegal problems prominent.
For the related violations reported by our reporter before, for example, individuals and enterprises illegally use business loans, consumer loans to pay the down payment of house purchase; Shell companies provide public accounts to receive loan funds and other problems, Shanghai Banking and Insurance Regulatory Commission has found typical cases in this investigation.
In addition, in the Shanghai Banking and Insurance Regulatory Bureau investigation found violations of the case, also included real estate companies illegally provided buyers with down payment funds; The loan of the small loan company is used for the purchase of a house. The Shanghai Banking and Insurance Regulatory Commission has handed over to the local government authorities any evidence of violations by small loan companies, pawn companies, real estate companies and real estate brokers found in the investigation.
As for the local banks, the Shanghai Banking and Insurance Regulatory Bureau said it has made rectification requirements on the related work of the banks according to the investigation of its commercial banks’ self-examination and regulatory audit. In addition, the Shanghai Banking and Insurance Regulatory Bureau also proposed that banks should report borrowers with fraudulent practices to the Shanghai public credit information service platform as trust-breakers. For bank employees who have violated the rules, internal accountability or disciplinary action should be taken.
Although only 16 banks have been investigated this time, Shanghai regulators are not done with their investigations.
Shanghai Banking and Insurance Regulatory Bureau said that the next step will be to earnestly implement the “Notice on Preventing Irregularly-Incorporated Loans from Filling into the Real Estate” jointly issued by the General Office of the China Banking and Insurance Regulatory Commission, the General Office of the Ministry of Housing and Urban-Rural Development and the General Office of the People’s Bank of China.
The Shanghai regulatory authorities will continue to step up supervision and inspection of the illegal inflow of business loans into the real estate market, take corresponding regulatory measures for the identified problems in accordance with the law, and supervise the commercial banks under their jurisdiction to continuously improve the quality and efficiency of financial services for the real economy, so as to promote the stable and healthy development of the real estate market in Shanghai.