Funds to support firms vital to outbreak sent to banks

The Chinese central bank delivered the first batch of special relending funds of 300 billion yuan ($42.85 billion) for a certain group of banks on Monday, supporting enterprises that supply goods and services for controlling the novel coronavirus outbreak.

Banks, including nine national large banks and local banks from 10 provinces, should use the special relending funds to provide loans to companies on a list. The companies were selected by central and local governments, and funds must be used directly to contain the coronavirus, said Liu Guoqiang, vice-governor of People's Bank of China, the central bank.

The bank loans under the special facility have a maturity period of one year. And the interest rates should be at up to 3.15 percent, or 100 basis points below the one-year loan prime rate, the new benchmark for the lending rate, according to the PBOC.

"We encourage banks to lend at even lower rates," said Liu, in a statement on the PBOC website.

The Ministry of Finance confirmed that the central government will provide subsidies for half of the real lending rates. The measures will ensure that the real financing costs of companies will be lower than 1.6 percent.

As of Saturday, financial departments from all levels have allocated 71.85 billion yuan in funds to prevent and control the epidemic, with 17.29 billion yuan from the central government, said Finance Minister Liu Kun on Sunday.