Wednesday, January 20, 2010

Bank of China halts lending without headquarter's approval

Bank Of China Ltd. has ordered its credit officials to halt any new yuan loans due to overly fast lending growth so far in January, a person familiar with the situation said Wednesday. The headquarters of the state-controlled lender has issued a notice to all of its branches to stop issuing new yuan loans and also curb foreign-currency denominated new loans, said the person, adding that the bank didn't say in the notice when new yuan loans will resume.

Any new loans, if they were to be extended, would have to be approved by the bank's headquarters, the person said...

Banking shares in Shanghai and Hong Kong fell on renewed concerns over lending supply after a Chinese media report that the China Banking Regulatory Commission has asked several commercial banks to stop issuing new loans in the remaining days of January.

(And check out this beauty)

The banking regulator has also been taking aim at the quality of loans being made, saying Monday that banks will be required to base their lending on real demand and properly manage the pace and quality of lending.