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China cracks down on rural banks with new capital and ownership rules

NPLs across smaller lenders stands as high as 7.3%
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China cracks down on rural banks with new capital and ownership rules Stricter standards address high NPL ratios, which have been exacerbated by challenges within China’s real estate market © Hejinghua/Dreamstime

China’s financial regulator has unveiled sweeping reforms for rural lenders through raising capital thresholds and tightening governance, as authorities seek to stabilise a sector burdened by weak asset quality.

The National Financial Regulatory Administration has outlined a framework for the country’s rural financial institutions, introducing higher capital requirements, implementing higher thresholds for bank ownership, and increasing accountability standards.

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Kimberley Long is the Asia editor at The Banker. She joined from Euromoney, where she spent four years as transaction services editor. She has a BA in English Language and Literature from the University of Liverpool, and an MA in Print Journalism from the University of Sheffield. Between degrees she spent a year teaching English in Japan as part of the JET Programme.
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