FINANCE

Beijing Tightens Grip on M&A Lending as New Rules Take Effect

Published: Jan. 1, 2026 12:48 a.m. GMT+8

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The National Financial Regulatory Administration (NFRA) said the changes are aimed at strengthening risk controls while promoting mergers that support industrial upgrading and asset revitalization. Photo: VCG

China’s top financial regulator has issued sweeping revisions to the rules governing bank loans for mergers and acquisitions, halving the cap on lending to single borrowers while easing payment restrictions in an effort to better manage financial risks and channel capital into productive deals.

The new rules, which took effect on Dec. 31, cut the maximum loan balance that a single borrower may hold to 2.5% of a bank’s net tier-one capital, down from 5%. The final rules follow a draft released in August for public consultation.

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China’s NFRA halved the M&A loan cap for single borrowers to 2.5% of a bank’s net tier-one capital, effective Dec. 31, 2023.
New rules ease some payment restrictions, clarify loan replacement rules, and encourage syndicated lending structures to reduce risk.
The changes aim to strengthen financial risk control, support productive mergers, and keep existing pilot M&A loan programs for technology and Shanghai Lingang New Area.

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