CX Daily: Banks Worry Individuals Are Using Loans to Ride Stock Market Boom

Stocks /

In Depth: Banks worry individuals are using loans to ride stock market boom

Chinese banks are increasing scrutiny of retail loans out of concern that they are being misappropriated to invest in the stock market, after demand for personal borrowing shot up amid the recent stimulus-fueled rally.

When stock exchange boards become a sea of green, the opportunities to cash in are too good to pass up for some. Despite regulators making clear that bank loans must not be used to buy stocks, and lenders specifying restrictions to the same effect, some borrowers are still using consumer loans or personal business loans to hop on the bull-market bandwagon.