Chinese banks halt mortgage lending after reaching 1st quarter quota on new loans: report

Some Chinese banks have halted mortgage lending to home buyers in major cities, as they have exhausted quarterly credit quotas imposed by the central bank, according to a report.

A quota system on mortgage loans was introduced on the mainland as part of a broader effort to arrest China’s runaway home prices.

Commercial banks were ordered by the People’s Bank of China in late January to cap mortgage issuance for the first quarter at a level no higher than the mortgage issuance in October to December. The new rules also stipulate that monthly mortgage loan growth cannot exceed the average growth in mortgage lending during the fourth quarter, sources at major banks in Beijing told the Post.

Industrial & Commercial Bank of China, Bank of China, and Everbright Bank Co, have used up their allocated quotas, according to a report by Caixin on Thursday, which said property agents in Beijing have temporarily halted their cooperation with these financial institutions.

However, a banker with China Minsheng Bank’s household credit department, who declined to be named, said her bank had not used up the first quarter’s quota and was still able to lend.