April 4, 2008

China's banking watchdog to ensure credit to grain producers

The China Banking Regulatory Commission (CBRC) on Thursday urged banks to ensure loans and credit to grain producers to boost the scant grain supply.

Jiang Dingzhi, vice chairman of the CBRC, said banks across the country should allow more funds to support grain production, while non-agricultural loans should be controlled, according to the China Daily.

Jiang pointed that the growth of agriculture-related loans this year should not be lower than that of last year. He further said that the freewill closure of the county branches and outlets of large commercial banks are not allowed.

Chen Xiwen, the director of the office of the central leading group on rural work, said that snow and drought which hit different parts of the country would make it harder to ensure grain supplies this year.

Aside from domestic adversities, the international grain supply shortage also adds pressure to the country's supply and demand gap.

In 2007, China's rain output exceeded 500 million tonnes which was still 15 million tonnes short of the actual demand.

Jiang urged rural cooperatives, commercial and policy banks to follow credit ethics and take on their social responsibilities to support rural development.

Futhermore, CBRC chairman Liu Mingkang, said that mortgage system should be renovated to allow easier loans for farmers.

Fiscal incentives should also be designed to encourage rural lending.

The central bank reiterated that credit preference would be given to relatively weak sectors including agriculture, employment, education and small- and medium-sized enterprises.