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Banks to ease loan repayment requirements
Last Updated: 2020-01-31 07:26 | China Daily
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Move to support those who lose source of income due to coronavirus outbreak

China will extend repayment plans for personal mortgage loans and credit cards of people who temporarily lose their sources of income due to the novel coronavirus outbreak, said the China Banking and Insurance Regulatory Commission.

In a recently issued notice, the country's top banking and insurance regulator demanded financial institutions adjust the above-mentioned repayment plans for those people flexibly and extend their loan terms reasonably.

The China Banking Association, a self-regulatory organization of the Chinese banking sector, also discouraged its members from blacklisting people who temporarily lose their sources of income and are therefore likely to default on their personal loans or credit cards.

Zhang Dawei, chief analyst with Centaline Property Agency, said it is still too early to estimate the impact of the coronavirus outbreak on the real estate industry.

"The level of impact depends on how long the virus outbreak lasts. Generally speaking, the industry outlook is not positive. Investors will become far less willing to invest in the real estate industry unless the outbreak has eased off," Zhang said.

Analysts are still waiting for details on which people will be defined as those who have temporarily lost their sources of income due to the coronavirus outbreak and how banks will adjust personal mortgage loan repayment plans for these people.

According to the notice recently issued by the regulator, banks are not allowed to withdraw or reduce their loans to the industries that may be hugely affected by the novel coronavirus outbreak, such as the retail, wholesale, catering, logistics, culture and tourism industries, as well as the companies that have great potential but suffer temporary difficulties.

The regulator encouraged banks to help relevant companies overcome the negative impact of the epidemic by appropriately lowering lending rates, improving loan renewal policies, and increasing the offering of medium-and long-term loans, as well as unsecured loans based on the companies' credit.

As of Tuesday noon, more than 20 banks had donated over 700 million yuan ($101 million) in support of the battle against the coronavirus outbreak that started in Wuhan, the capital of Hubei province.

Many banks launched policies to better meet the financing needs of businesses that are engaged in the research, production and distribution of medicines, and protective and medical equipment for combating the virus. The policies include offering loans at lower rates and waiving fees.

China Merchants Bank Co Ltd, a joint-stock commercial lender headquartered in Shenzhen, Guangdong province, took the lead among banks in terms of the amount of money donated, which was 200 million yuan. As of Tuesday, its Wuhan branch had issued loans totaling 2.94 billion yuan to medical institutions and pharmaceutical companies involved in the prevention and control of the coronavirus.

Financial institutions in the insurance sector also contributed to the epidemic prevention in their own ways.

The Insurance Association of China called on insurers to settle claims first of clients infected with the coronavirus and allow them to hand in all the documents required later, in addition to urging insurers to moderately extend the scope of their responsibilities in this regard.

The association also encouraged insurers to accelerate the development of insurance products and services targeting doctors, nurses, disease control personnel and their families, to provide financial coverage for disability and death caused by virus infection and other accidents during the process of disease control and prevention.

China Life Insurance Co Ltd, a leading life insurer in China with extensive geographic coverage, launched a 24/7 online channel to settle claims of the clients who caught pneumonia caused by the novel coronavirus. It had settled four such claims by the end of Wednesday.

The company also donated life insurance policies to 180,000 doctors and nurses combating the coronavirus outbreak in Wuhan. The sum insured is 500,000 yuan per person.

Hu Yuanyuan contributed to this story.

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Banks to ease loan repayment requirements
Source:China Daily | 2020-01-31 07:26
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