Beijing Uses Big Data to Analyse Illicit Flows of Bank Funds into Local Property Market

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The Beijing municipal government is turning to big data tools to help track potential illicit flows of funds into the local property market.

The Beijing banking authority said that illicit funding activity had become a source of increasing concern for regulation of the property sector.

“Some home buyers are misappropriating consumer loans or business loan funds for home purchases or ‘bridging’ funds, and some illegal intermediaries are participating in order to reap profits, greatly exacerbating this illicit conduct,” said the Beijing banking regulator on 30 January.

In order to stymie this conduct the regulator said that it was making use of big data technology to improve its analytical and investigatory capabilities.

“We are undertaking big data screening of problems outlined by reports from the public, and issuing regulatory warnings to banking organisations within our jurisdiction concerning issues uncovered by such screening,” it said.

The Beijing banking regulator said that since the second half of 2020 it had required that banks within its jurisdiction conduct “comprehensive self-inspections” of the compliance of personal consumer loans and personal business loans, in order to determine if funds were being illicitly used for housing purchases.

The Beijing municipal government has also recently established a specialist work team to conduct investigations of loan compliance on-site.

Heightened security of lending compliance by Beijing banks arrives amidst strong signals from the Chinese government that lending to the property sector will be kept on a tight leash in 2021, as part of ongoing efforts to prevent urban housing markets from overheating.

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