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China Bank Lending Cap Scrapped by Top Legislature, Xinhua Says

China’s National People’s Congress has voted to remove a two-decade-old rule that capped banks’ lending relative to deposits at 75 percent, Xinhua News Agency reported.

The amendment to the Law on Commercial Banks, which was approved by the NPC Standing Committee at the end of a bimonthly legislative session, will take effect on Oct. 1, Xinhua reported Saturday. The loan-to-deposit ratio will now be regarded as a liquidity-monitoring indicator, according to the amendment. The NPC is China’s top law-making body.