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China orders financial support to quake regions

(Xinhua)
Updated: 2008-05-21 11:01

Chinese banks have been ordered to provide financial support, including extension of loan maturities, for relief and reconstruction in quake-ravaged regions.

Banks should not push for loan repayment if debtors in the quake-hit regions fall behind in payments, the People's Bank of China (PBOC), the central bank, and the China Banking Regulatory Commission said in an online circular.

Giving full consideration to the difficulties of the survivors and businesses, the lenders also should not levy fines for defaults or add default notices to borrowers' credit records, the circular noted.

The death toll from the magnitude 8.0 quake on May 12 has risen to more than 34,000, with the final figure expected to exceed 50,000. The quake flattened tens of thousands of houses and left millions homeless.

The PBOC was considering "special solutions" for mortgage loans as many borrowers were either killed in the quake or lost their homes. Further, an expected decline in borrowers' incomes following the quake would make the mortgage a heavy burden.

The PBOC has allowed banks in six hard-hit cities in the southwestern province of Sichuan to hold their reserve requirement ratio steady. The ratio for banks in other regions was raised on Tuesday to a record high of 16.5 percent amid the latest moves to rein in inflation and prevent economic overheating.

Lenders were ordered to set up temporary outlets near shelters and ensure the billions of yuan in donations and relief funds reached the quake regions in a timely manner.