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Beijing – A number of banks have temporarily halted lending to businesses and individuals apparently due to mounting pressure from liquidity shortages.
They include some branches of Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC), sources from the two banks said. The bank was already having a hard time keeping up with deposit-to-loan ratio requirements even before the liquidity shortages hit, not to mention executives' recent determination to sort out the bank's liquidity management and control loans.
BOC plans to resume lending on July 15, he said. As for ICBC branches, the amount of loans they can make is routinely capped under a monthly limit set by headquarters, a source from the bank's Shenzhen branch said. It was not unusual for branch banks to reach lending quotas before the end of month, he said. What was rare, however, was that headquarters had cut down on the quotas to make room for its own operations. "All of our loans have been put on hold," the source said, "There may be some credit line when it comes to July, but it will definitely be used up in a few days."
Meanwhile, a banker from ICBC's Shanxi branch said it could still offer loans. CITIC Bank and Huaxia Bank had suspended mortgage loans, the manager of a real estate agency said. Industrial Bank halted making loans and discounting bills, an insider said.
On June 23, ICBC customers had trouble using its online, counter and ATM services. This included making withdrawals and paying bills. The same thing happened to BOC users a day later.
The two banks responded by saying the disruptions were caused by system upgrades. However, users of China's Twitter-like weibo services were not convinced the problems were unrelated to the banks' liquidity situations.