People's Bank of China and China Banking Regulatory Commission, Circular on Strengthening the Credit Management for Commercial Real Property

Issued: September 27 2007

Main Contents: Commercial banks may not grant loans to real property projects in which the ratio of the project capital (owner¡¦s equity) is less than 35% or for which the leasehold certificate, planning permit for land used for construction, planning permit for construction project or construction permit has not yet been obtained, or to real property developers that have stocked up land and sources for housing. Commercial banks may not accept commodity premises that have been vacant for three years or more as a collateral for loans. In principle, loans granted to real property developers may only be used for projects in the same region (Article 1). Commercial banks may not grant loans that are specifically used for payment of land grant fees to real property developers (Article 2).