China banks on sharing of debt info

New rules laid out by China’s banking regulator will require banks lending to the same client to share the borrower’s credit history as well as set a limit for the funds the client can take on, Caixin reports.

 

Continuing Beijing’s deleveraging campaign, this latest round of regulation hopes to put restrictions on companies taking on irresponsible levels of debt from multiple lenders, according to the China Banking and Insurance Regulatory Commission.

 

Banks sharing a customer will share information such as the borrower’s total debt levels, any unreported affiliated companies, cross-checking the firm’s financials and repayment programs with one another. Lenders must also agree on a “joint credit granting mechanism” for companies borrowing over RMB 5 billion ($780 million) from over three separate banks.

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