China pushes banks to speed up approvals of new loans to private developers: Reuters

Chinese regulators are pushing banks to speed up approvals of new loans to cash-starved private property developers, people with knowledge of the matter said, a bid to revive homebuyer sentiment that risks denting lenders' asset quality.

The effort uses the "whitelist" mechanism, Beijing's latest support measure aimed at easing the sector's unprecedented liquidity squeeze and spurring home purchases, as new home prices fell in February for an eighth straight month.

Most top domestic banks have so far shied away from significantly bolstering credit exposure to the crisis-hit sector despite repeated nudges from Beijing, dashing hopes of a revival in an industry crucial for the economy.

The property sector in the world's second-largest economy has lurched from one crisis to another since 2021, after a regulatory crackdown on developers' high leverage led to a liquidity crisis.

Now the banking regulator wants faster loan approvals for residential projects under the "whitelist" mechanism, with effect from last week, the sources said, a demand that Reuters is reporting for the first time.

The sources spoke on condition of anonymity because they were not authorized to speak to the media on the subject.

The banking regulator, the National Financial Regulatory Administration, or NFRA, did not respond to a Reuters request for comment.

Developers and bank statements say banks have been reluctant to grant new loans to property projects, while mostly extending maturity and lowering interest rates of existing loans.

The "whitelist" program covers projects of state-backed and private developers that need fresh financing of 1.5 trillion yuan ($207.51 billion), one of the sources said.

In last week's directive, the regulator gave banks until the