ICBC, CCB responding to alleged home loan policy changes

BEIJING - Two of China's four major banks have given ambiguous responses to earlier reports that the central bank has decided to relax mortgage lending policy.

The Industrial and Commercial Bank of China (ICBC), the country's largest bank, and the China Construction Bank (CCB) both said they support individual's demand for home loans but avoided commenting on the murmurs of relaxed mortgaged lending.

On Tuesday, without giving a direct answer, an ICBC official said "we seriously implement the country's policy directions concerning the housing market, and we have been actively supporting the rational demand of personal housing and property development," according to the official China Securities Journal.

The CCB likewise told Xinhua that the bank has always been backing individual home loans and will continue to support residents to improve their living conditions.

Their statements came one day after the central bank, as reported by Chinese media Monday, asked the four big commercial banks to relax their mortgage rules, which will require a lower down payment on the purchase of a second home amid the sluggish property market.

The original rule stated that any buyer of a second home, with or without mortgage, has to pay a minimum down payment of 60 percent and be charged a mortgage loan rate at 10 percent or more above the benchmark lending rate.

The new rule is said to relax this definition. If the mortgage of a previous home has been fully repaid, the new purchase and new mortgage may be treated as a first mortgage, which requires a lower down payment, 30 percent, and is charged a lower rate, at or with a small discount to the benchmark.

"The ICBC is closely watching the changes in the property market and adjustments in related policies. We will timely take follow-up actions for relevant credit policies and continuously improve correspondent financial services," the ICBC added.

The four banks are to announce new rules which will ease the mortgage policies, the official Shanghai Securities Journal reported earlier on Tuesday, citing unconfirmed sources.

In addition, the CCB advised accelerating the establishment of a differential policy on home loans that will restrain regulatory investment but support home purchase to improve living conditions.

The People's Bank of China, the central bank, has not commented on the matter.

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