China's Supreme Court slashes ceiling of legal private lending rate

BEIJING (Reuters) - China’s Supreme People’s Court said on Thursday that it will slash the ceiling of the private lending rate protected by law, a move to crackdown on usurious loans and lower the costs of country’s struggling small businesses.

The ceiling will be capped at four times that of the loan prime rate (LPR), said He Xiaorong, a member of the Supreme Court’s judicial committee, at an online new conference, meaning the upper limit of one-year private loan would be capped at about 15.4% based on the current LPR rate.

Before the amendment, China’s courts would protect an individual or business in private loan disputes with interest rates below 24%. Private loan interest rates above 36% are considered as illegal loans.

Reporting by Cheng Leng, Judy Hua and Gabriel Crossley; Editing by Alison Williams