Loan Ceilings Raised For China’s Small- And Mid-Sized Banks

Another of the myriad small steps being taken to keep the economy’s growth rate from falling below the magical 8% mark: small- and medium sized banks are being given more room to make loans to help finance the 4 trillion yuan stimulus package.

The banking regulator singled out farmers, small businesses and sound businesses facing temporary financial difficulties as customers banks should particularly favor. To that end it is relaxing the restriction on small- and mid-sized banks that limits their loan book to 75% of their deposits. With Beijing stumping up only 30% of the 4 trillion yuan itself, it needs to tease out the rest wherever it can.

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