Mar 17, 2021 07:45 AM

Guangdong Regulator Cracks Down on Illicit Property Borrowing

What’s new: Banking regulators in Guangdong clamped down on 277 million yuan ($42.6 million) of bank loans that illicitly financed real estate transactions as a part of a broader campaign to cool the overheated housing market.

The loans were made to 920 borrowers as consumer and business loans, according to the Guangdong banking regulator. Banks involved in the misconduct were ordered to correct their practices, the regulator said.

The findings followed a provincewide inspection that covered 4,501 banking outlets and examined 567.8 billion yuan of business loans and 216.5 billion yuan of consumer loans, the regulator said.

The background: Banking regulators in major Chinese cities have tightened scrutiny of bank lending to mitigate risks to the financial system.

Last month, regulators in Beijing and Shanghai announced investigations into whether any consumer or business loans were illicitly used by borrowers to purchase property. The moves followed surging home prices in big Chinese cities as pent-up demand was released in the wake of the domestic Covid-19 epidemic.

In recent years, some homebuyers have turned to consumer or business loans to make purchases. To tap into this business, real estate agents offer a service in which they falsify business contracts and other documents required by banks in the review process for issuing business loans, sources familiar with the matter told Caixin previously.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Related: Big Chinese Cities Clamp Down on Illicit Loans Used to Buy Property

Contact reporter Han Wei ( and editor Bob Simison (

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