The China Banking and Insurance Regulatory Commission said banks should set up a joint credit mechanism for companies with individual credit accounts of more than 5 billion yuan linked to more than three banking institutions.
Banks may do this on a voluntary basis for companies with credit accounts of between 2 billion yuan and 5 billion yuan that are also tied to more than three banking institutions, the regulator said in a June 1 release of trial measures governing joint credit grants.
The rules, aimed at curbing overfinancing and major credit risks, have been implemented on a pilot basis, the CBIRC said.
Among other things, the regulator stated that banks involved in a joint credit mechanism shall establish a committee to collect, exchange and verify data to ensure companies are not evading bank credit management requirements.
Companies subject to such a mechanism will also need approval from the committee before executing major financing and guarantees, via channels other than the banks extending the joint credit, that may substantially change their debt structures.
As of June 1, US$1 was equivalent to 6.42 Chinese yuan.
