The People’s Bank of China (PBOC) has launched a re-lending scheme that will provide a total of 300 billion yuan (approx. USD$42.95 billion) to help key enterprises to combat the impacts of the coronavirus.
PBOC commenced provision of its first batch of special re-loans on 10 February with the approval of China’s State Council.
PBOC deputy-governor Liu Guoqiang (刘国强) said that the re-lending scheme would provide funds to nine major nation-wide banks alongside key lenders in 10 provinces.
The nine nation-wide banks granted access to the scheme are comprised of China’s three policy banks and six big state-owned lenders, including,
- China Development Bank,
- The Export-Import Bank of China,
- The Agricultural Development Bank of China,
- The Agricultural Bank of China,
- Bank of China,
- China Construction Bank,
- Bank of Communications,
- Postal Savings Bank of China.
PBOC’s offices in a total of ten key provinces will each select up to three local legal person banks, with these locations including:
The re-lending funds will be directed towards a list of key enterprises that fall into two categories:
- National key enterprises, the list of which will be confirmed by the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), and
- Local key industries, the list of which will be determined by province-level governments, for submission to the NDRC and MIIT for filing.
Liu said that the re-loan funds would be used for disease-prevention activities by key enterprises, and could not be used for regular operating purposes.
The term for the special re-loans is one year, and banks must provide funds at a preferential rate of 100 basis points below the most recently announced one-year loan prime rate (LPR), which currently stands at 3.15%.