Reuters logo
China's central bank proposes tighter rules for car loans
December 27, 2016 / 2:53 AM / 9 months ago

China's central bank proposes tighter rules for car loans

Cars line up near a toll station on the first day of China's National Day holiday, in Nanjing, Jiangsu province, China, October 1, 2016. REUTERS/Stringer

SHANGHAI (Reuters) - China issued proposed new guidelines on Tuesday aimed at tightening rules and standardising criteria for granting car loans, in a move to address concerns over the risk of borrowers defaulting.

Car loans have soared in recent years partly as a result of financing deals offered by automakers to boost sales. Nearly 30 percent of purchases were made on credit last year, up from 20 percent in 2013 , according to analysts from Sanford C. Bernstein and Deloitte.

The People's Bank of China issued the revised guidelines on its website and sought feedback from the public by Jan. 27.(www.pbc.gov.cn).

In future, the PBOC said borrowers must provide valid guarantees, and lenders will have to establish a credit rating system and use independent external credit rating facilities to assess a customer’s creditworthiness.

Reporting by David Stanway; Editing by Simon Cameron-Moore

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below