On May 20, China Construction Bank announced preferential lending policies for post-disaster reconstruction projects. Low interest RMB loans will be made available to finance earthquake relief efforts and reconstruction.
For individual housing loans the rate will be set 15 percent lower than the benchmark rate. For other loans, it will be set 10 percent lower than the benchmark rate.
The bank also announced that penalties for late repayment of existing loans will be waived if repayment difficulties are due to the earthquake. This measure will apply to individuals and enterprises, RMB and foreign currency loans.
As regards to late repayment of overdrafts and credit card debts due to earthquake disruption, the bank announced that the interest-free period will be extended, and in some cases the interest will be reduced or waived.
Existing loans that are diverted to reconstruction projects or relief work will be exempt from late repayment penalties but will not be eligible for the new preferential interest rate, so the original interest rate will still apply. For other types of local and foreign currency loans allowed a repayment grace period because of the earthquake, the interest rate will be implemented according to the original contract deadline.
China Construction Bank said it will continue to announce adjustments to its policies in light of the situation in disaster areas and will continue to provide financial services to those in urgent need, to support relief efforts, and post-disaster reconstruction work.
(China.org.cn by Wang Wei, May 21, 2008)