MNI POLICY: China Banks to Ease SME NPL Standard: Regulator

     BEIJING (MNI) - China's bank regulator has asked banks to ease requirements

on non-performing loans (NPLs) and reduce the lending rate charged to small

businesses by more than 0.5 percentage point this year, said Li Junfeng,

director of the Inclusive Finance Department of the China Banking and Insurance

Regulatory Commission.

     Loans with modest overdue payments because of the coronavirus outbreak

won't count as NPLs or affect small businesses' credit ratings, Li said at a

press briefing on Friday. NPL forgiveness can be extended in areas and

industries severely affected by the epidemic, Li added.

     Here are other takeaways by Li and Peng Lifeng, deputy director of the

Financial Markets at the People's Bank of China.

     - The big-five banks should show leadership, lowering the lending rates to

as low as 4.7%, even lower for virus-affected regions, said Li. 

     - Banks should halt interest payments for small companies for a period of

time, said Li.

     - Banks should proactively roll over loans set to mature at the end of June

2020 for small companies to safeguard their funding needs, said Li.

     - Local government financing guarantee institutions should expand the scale

of guarantees by 10 times, and gradually lowering fees to less than 1%, said

Peng.

     - The PBOC has received applications for a CNY300 billion special

re-loaning from thousands of key companies. These preferential loans are being

quickly issued carrying rates 2-3.15%, said Peng.

     - Investors are rational and have confidence over China's growth, with

recent market activity seeing the impact of the epidemic is temporary. The

central bank will respond to risks in a timely fashion to keep markets stable,

Peng said.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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