Arab Today, arab today china to scrap constraint on bank lending
Last Updated : GMT 20:24:23
Arab Today, arab today
Arab Today, arab today

China to scrap constraint on bank lending

Arab Today, arab today

Arab Today, arab today China to scrap constraint on bank lending

China is to abolish a limit on the amount of loans
Beijing - AFP

China is to abolish a limit on the amount of loans banks can grant, a liberalising step for the heavily-regulated banking sector which could make stimulus measures more effective.

Banks will no longer be required to cap the amount of loans they make at 75 percent of the deposits they keep, known as the loan-to-deposit (LDR) ratio, according to a statement released on the website of the State Council, China's cabinet, after a regular meeting on Wednesday chaired by Premier Li Keqiang.

The proposal is expected to be approved by the standing committee of the country's rubber-stamp legislature.

Regulators will still "monitor" the ratio but it will no longer be mandatory, according to the statement.

The requirement, first imposed on state-owned commercial banks in 1998, is outdated as banks can now raise funds in several ways other than deposits, the People's Daily, the ruling Communist Party's mouthpiece, said Thursday.

Analysts said the move will allow lenders, particularly smaller banks, to lend more, and will make cuts in the reserve requirement ratio (RRR), a limit on the amount of money banks must keep in reserves, more effective.

The existence of the LDR has limited the impact of recent RRR cuts by Beijing, a stimulus measure to promote lending and boost slowing growth in the world's second-largest economy.

"Easing the LDR regulation will help banks to extend loans, but the short-term impact on loan growth will likely be limited,"  Nomura analysts said in a report, citing dampened loan demand and lenders' caution over credit risks.

ANZ economists Liu Ligang and Raymond Yeung said in a research note Thursday: "Since commercial banks will be allowed to lend more from their deposit base, the change can help lower cost of borrowing and improve monetary policy transmission mechanism."

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china to scrap constraint on bank lending Arab Today, arab today china to scrap constraint on bank lending

 



Arab Today, arab today
Arab Today, arab today Nohan Seyam designs beautiful accessories for women

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories for women
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today 11 family members dead in rebel push

GMT 07:57 2017 Tuesday ,21 February

11 family members dead in rebel push
Arab Today, arab today To probe sexual harassment claims

GMT 10:08 2017 Tuesday ,21 February

To probe sexual harassment claims
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today 57 monkeys carrying 'invasive' genes

GMT 16:00 2017 Tuesday ,21 February

57 monkeys carrying 'invasive' genes
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Ahmed Fahmy stresses he did not ignore singing

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 14:51 2017 Monday ,20 February

Ways to acquire presentation skills

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday