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China's banking regulator eases bad loan rules to help lenders: sources

Published 04/26/2017, 10:28 PM
Updated 04/26/2017, 10:30 PM
© Reuters.  China's banking regulator eases bad loan rules to help lenders: sources

© Reuters. China's banking regulator eases bad loan rules to help lenders: sources

SHANGHAI (Reuters) - China's banking regulator on Wednesday relaxed the rules for the transfer of non-performing loans, allowing lenders to sell soured debt in bundles of three from the previous 10, three sources with direct knowledge told Reuters.

The move is the latest by the China Banking Regulatory Commission (CBRC) to ease lenders' struggle with a mounting pile of bad debt as borrowers struggle with the slowing economic growth.

Smaller bundles of NPLs would enable banks to offload the bad debt faster.

The new rules in the CBRC notice, which was circulated to China's banks on Wednesday, will make it easier for lenders to transfer out their bad loans, the sources said.

China's banks have been struggling with shrinking margins after successive interest rate cuts and growing bad debt as the country's growth rate hits its slowest stride in over a quarter century.

CBRC did not respond to immediate requests for comment.

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