LENDERS in Shanghai are running out of time to announce the detailed implementation of the new mortgage policies.

Banks, including the Bank of Communications and the Shanghai Pudong Development Bank, are still working on the details and are yet to announce how they will introduce the new policies.

The People's Bank of China, the country's central bank, said last Wednesday that from yesterday the maximum interest rate discount for individual mortgages can be raised to 30 percent (up from 15 percent). Home buyers can also enjoy a minimum deposit of 20 percent down from 30 percent as a way of spurring the real estate market.

Banks were asked to finish drafting their detailed regulations by yesterday, including providing details for the clients who may enjoy the maximum interest discount. However, there were no announcements of any details yesterday.

While home buyers are eager to know exactly how much interest they will be able to save with the new central government policies, bankers are carefully calculating how much it might cost them. Banks, in an unspoken consensus, are also waiting to see what each other will do to avoid too much differentiation.

Chinese mainland banks mainly generate profits through interest on income, or the spread between a lower deposit rate and a higher lending rate.

Under the new policies, home buyers can enjoy a five-year interest rate of 5.25 percent after the 30 percent discount on the benchmark rate of 7.47 percent. The five-year savings account deposit rate is 5.58 percent.

With a deposit rate higher than the lending rate, banks are actually facing losses which might explain why it is taking the lenders a while to figure out how much they can afford to woo qualified low-risk clients.

Banking analysts are translating the new policies as a short-term hit on lenders even though the banks will benefit from a more healthy property market over the long term.