| From Quamnet.com: The People's Bank of China, the central bank, said it has called on commercial banks to tighten loans to property developers in what it described as an effort to encourage more efficient land use.The central bank said in a circular released jointly with the banking regulator that landbanking loans, where already acquired property is used as collateral for bank financing, should not be extended for more than two years.It also restated its curbs on bank loans being used directly for land purchases by developers.
The circular on the central bank website, though posted today, was dated from late last month. The bank did not give an explanation.The circular also restates prohibitions on banks extending loans to developers that have developed less than one-third of the planned area of a project after one year or have invested less than one quarter of their proposed investment.The document also forbids banks from lending to developers that have allowed land to sit idle for more than two years...... Full Article: Source
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