CHINA'S banking industry offered more support to earthquake-hit areas in Sichuan Province by waiving interest charges on loan defaults due to the disaster.
Banks won't demand that companies and individuals in the hardest-hit areas pay back their loans immediately, the People's Bank of China and the China Banking Regulatory Commission said in a joint notice posted on their Websites on Monday night.
Banks won't impose a late interest fee on the loan defaulter, who will be exempted from being recorded on the nationwide credit database, according to the notice.
Banks in Sichuan, Gansu, Yunnan and Shaanxi provinces as well as Chongqing and other hardest-hit areas will implement the policy. The regulators gave an assurance the policy will stay until major relief work ends. The local banking regulators will determine when to cease the policy.
The top regulators said they support lending to hard-hit industries including power, telecommunications, roads and railways. They will also ensure that relief credit will be available as soon as possible.
The central bank has already announced that banks in the disaster-hit area will be temporarily exempted from having to meet the new reserve requirement ratio.
Banks in other parts of the country have had to raise their reserve ratio to 16.5 percent since yesterday while lenders in the hard-hit areas can still maintain the 16-percent ratio so that lenders in the damaged areas have more cash to support relief work.
Reconstruction loans
Chinese banks have offered 2.99 billion yuan (US$429 million) of loans for reconstruction work in the earthquake-hit areas by noon on Monday.
Agricultural Bank of China will offer preferential loan rates for those affected by the disaster and extend repayment terms for mortgages by three to six quarters, Vice President Zhang Yun said.
Industrial & Commercial Bank of China, Bank of China and Bank of Communications said they'll ease loan terms and change repayment dates without charge.
By 6pm yesterday, the official death toll in the devastating 8.0 magnitude quake had reached 40,075, with 247,645 people injured.