Banking Regulator Investigation into Long-term Loans Touches on Railway Projects

A source close to China Banking Regulatory Commission (CBRC) revealed that the regulator had begun looking into loans made by Chinese commercial banks to various railway projects. In the past, the banking regulator had already expressed concerns with the terms on which some of the mid to long-term infrastructure or "iron rooster" loans made by the banks had been issued, saying that excessively long periods alloted to the repaying of the loans had increased the possibility of serious credit risks in the future. The source said that of the loans extended to country's railway department by the 5 largest state-owned banks, 67% were extended over more than 20 years. However, the investigation was not limited to loans made to the railway sector.

Source
21st Century Business Herald

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