Recently commercial banks received an initial nod from relevant authorities to invest in insurance shares. This has caused supervising departments to strictly control fund resources poured by these banks into shares held by insurance companies, revealed by authoritative sources Wednesday.
In addition to the ban of credit funds, the ratio of capital supply will also be restricted.
According to the sources, considering that the credit funds are from individual deposits, banning the investment of credit funds is being mandated to avoid any risks imposed on a bank's pay-back capacity caused by investment failure.
Meanwhile, it is said that the ratio of capital supplied by commercial banks to insurance stock should not be excessive. But to date the exact ratio has yet to be clarified.
For more details, please read the full story in Chinese (http://www.cs.com.cn/yh/02/200802/t20080214_1366001.htm).
(China.org.cn February 14, 2008)