Chinese banks have been ordered to reduce the lending rates they charge small businesses in the third quarter relative to the first quarter according to two sources who spoke to Reuters.
According to the anonymous sources banks were told by central government financial regulators to keep the asset quality and overall cost of lending to small businesses at reasonable levels.
The sources said that a non-public notice issued by the China Banking and insurance Regulatory Commission (CBIRC) towards the end of June called for banks to improve real-time monitoring of lending rates.
Beijing has heavily stressed the need to better service the financial needs of China’s small and micro-enterprises, with the two latest rounds of targeted reserve ratio cuts partially designed to shore up financial inclusion.
China’s central government financial authorities also launched a slew of official measures to bolster financial inclusion for small and micro-enterprises towards the end of June, while in May CBIRC stepped up monitoring of related interest rates.