Thursday, December 18, 2008

Lending rate 10 % off for low-rent homes construction

The central bank and the China Banking Regulatory Commission (CBRC) jointly promulgated "Measures for Construction Loan of low-rent homes" yesterday to be in line with consumption expansion and boost of healthy and rapid economic growth. The Measures stipulates that leading rate of low-rent homes construction should be 10 percent lower than the interest rate benchmark for corresponding and same-grade loans released by the central bank. The Measures is to be effective in 30 days after the day of official promulgation.

It is ruled that the applied amount should not exceed the repurchase price in the low-rent homes repurchase agreement signed with government with a maximum of 5 years. And there can be the third party if creditors fail to provide adequate mortgage.

The measures pointedly noted that creditors should strictly comply with loan regulations and report capital using, construction progress and financial standing periodically.

The central bank and the CBRC urged banks to stick to the Measures in a bid to better serve development and construction of low-rent homes.

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