Shanghai’s banks ordered to be strict with mortgages

by Richard Kilner

Story link: Shanghai’s banks ordered to be strict with mortgages

In an effort to maintain property price stability Shanghai’s banks have been instructed by the city’s banking regulator to take a cautious approach to mortgage lending.

The move is also hoped to discourage speculation.

The regulator, who made the statement on Sunday, also said that strict mortgage lending policies must be exercised, and would be enforced by on the spot checks.

The instruction has come following reports in the media that some banks have lowered the threshold of lending standards in an attempt to bolster mortgages, and the profits they deliver.

A slowing of investment in the property market in Beijing and Shanghai has been observed, but the government remains intent on preventing the market overheating across the country through its strict use of policy.