BUSINESS China's banking regulator reports cases of illegal fee charges in loan issuance to SMEs

BUSINESS

China's banking regulator reports cases of illegal fee charges in loan issuance to SMEs

Xinhua

18:48, December 05, 2019

BEIJING, Dec. 5 (Xinhua) -- China's banking regulator has reported typical cases of banks' illegal fee charges in loan issuance to small and micro-enterprises (SMEs), as part of its efforts to effectively lower the financing costs for SMEs.

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File photo: VCG

The cases included illegal tying of life insurance products, illegally transferring the collateral evaluations fee to SMEs and asking them to purchase property insurance for collateral, the China Banking and Insurance Regulatory Commission (CBIRC) said.

Banking institutions should redress excessive sales, tie-in sales and arbitrary charges as well as rectify the unreasonable conditions attached in loan issuance that lift the financing costs, the CBIRC said.

It also called for banks to ramp up loan issuance to SMEs targeting disadvantaged firms and effective credit demands to bring down the overall financing costs and urged banking authorities at all levels to tighten supervision on fee charges.

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