China’s banking regulator has scaled back its restrictions on non-performing loans as part of efforts help lenders deal with burgeoning bad debt.
Sources told Reuters that the China Banking Regulatory Commission (CBRC) has relaxed its rules concerning the transfer of non-performing loans, in a bid to enable banks offload them with greater ease.
Chinese banks will now be permitted to sell their dud debts in smaller bundles of three, as compared the 10 just previously. The move will make it easier for lenders to shift their NPL’s by cutting down on transaction sizes.
CBRC issued the directive on NPL transfers to China’s banks on Wednesday.
The move is strikingly at odds with the recent regulatory crackdown on China’s lending sector launched by CBRC chairman Guo Shuqing ever since he assumed the body’s top position in February this year.