What’s new: Beijing joined a parade of Chinese regions to crack down on illicit borrowings through individual business loans to speculate in the housing market, in a broader campaign to rein in the overheated property sector.
The banking and insurance regulator in the capital city said an inspection launched in the second half 2020 found 340 million yuan ($52 million) of individual business loans extended by local banks were misused for property speculation.
The regulator said it has launched investigations of four banks on alleged misconduct, without naming the institutions.
The background: Beijing is the latest Chinese city to launch a crackdown on illegal lending for property speculation, following surging home prices in big cities as pent-up demand was released in the wake of the domestic Covid-19 epidemic.
Earlier this month, banks in Shenzhen recalled 21 individual business loans totaling 51.8 million yuan under orders from local regulators as part of a crackdown on illegal lending.
Speculators have in recent years exploited individual business loans originally aimed to support small and midsize enterprises to illicitly fund property purchases, usually with the help of real estate agencies.
Contact reporter Han Wei (weihan@caixin.com)
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