Notice of the People’s Bank of China and the State Administration of Foreign Exchange on doing a good job in financial services for epidemic prevention and control and economic and social development

Yinfa [2022] No.92

At the beginning of the COVID-19 epidemic, in accordance with the decision-making arrangements of the CPC Central Committee and the State Council, the People’s Bank of China, together with relevant departments, timely issued the Notice on Further Strengthening Financial Support for the Prevention and Control of Pneumonia in novel coronavirus (Yinfa [2020] No.29), proposing 30 measures such as monetary credit and financial services, which provided strong support for the prevention and control of the epidemic and the recovery and development of the real economy. At present, affected by the epidemic situation and domestic and foreign factors, China’s economic development faces triple pressures of demand contraction, supply shock and expected weakening. In order to further improve the financial support for epidemic prevention and control and economic and social development, relevant matters are hereby notified as follows:

First, give full play to the dual functions of monetary policy in aggregate and structure, and increase financial support for industries, enterprises and people affected by the epidemic.

(1) Maintain a reasonable and sufficient liquidity. Through open market operations, standing loan facilities, refinancing, rediscounting and other monetary policy tools, we will provide sufficient liquidity, guide financial institutions to expand loan lending, and enhance the stability of total credit growth. Give full play to the reform efficiency of quotation interest rate in the loan market, promote the steady decline of comprehensive financing costs of enterprises, and promote financial institutions to make reasonable profits to the real economy. Branches of the People’s Bank of China may appropriately increase the tolerance of deposit reserve assessment for financial institutions substantially affected by the epidemic.

(two) to provide differentiated financial services for industries that are greatly affected by the epidemic. Make good use of small-scale re-loans to support agriculture and rediscount policy, increase the amount of small-scale re-loans to support agriculture in a timely manner, and guide local corporate financial institutions to increase their support for contact service industries such as accommodation, catering, wholesale and retail, cultural tourism and other promising industries that are temporarily affected by the epidemic.

Strengthen information sharing with the competent departments of commerce, cultural tourism, transportation and other industries, organize various forms of government-bank-enterprise docking activities, help banks improve their customer acquisition, risk assessment and control capabilities, and develop chattel mortgage and credit loan products according to the characteristics of enterprises.

(3) Increase financial support for trapped market entities such as small and micro enterprises. Give full play to the role of universal micro-credit support tools. From January 1, 2022 to the end of June, 2023, we will provide incentive funds according to 1% of the increase in the balance of universal micro-credit loans of local corporate financial institutions, and encourage financial institutions to stabilize the stock of universal micro-credit loans and expand the increase. Incorporate the Pratt & Whitney Small enterprise credit loans Support Program into the management of small-scale re-lending for supporting agriculture. Since 2022, the re-lending amount of 400 billion yuan originally used to support Pratt & Whitney small-scale credit loans will continue to be used in a rolling way, and it can be further increased if necessary, so as to guide financial institutions to increase the proportion of credit loans and first-time borrowers.

Financial institutions should promote the model of active credit granting and loan repayment, so as to better meet the needs of small and micro enterprises. It is necessary to refine the requirements of internal fund transfer pricing, bad tolerance, due diligence and exemption, performance appraisal, optimize the allocation of credit resources, strengthen the empowerment of financial technology, and accelerate the improvement of financial service capabilities of small and micro enterprises. According to the principle of marketization, we should actively support trapped enterprises to resist the impact of the epidemic by providing medium and long-term loans, lowering interest rates, extending or renewing loans, and not blindly limit loans, draw loans or cut off loans. It is necessary to actively connect the credit information of enterprises in different fields such as finance, government affairs, public utilities and commerce related to the credit information platform, alleviate the information asymmetry between banks and enterprises, and improve financing efficiency.

(4) Improve the quality and efficiency of financial services for key areas and people in distress. Financial institutions should improve the financial supply level in areas seriously affected by the epidemic by adjusting regional financing policies, internal fund transfer pricing, and implementing differentiated performance appraisal methods.

For those who are hospitalized or isolated due to infection in COVID-19, those who need isolated observers for epidemic prevention and control, and those who have temporarily lost their sources of income due to the epidemic, financial institutions should optimize their credit policies in time, distinguish between repayment ability and repayment willingness, and distinguish between short-term repayment ability and medium-and long-term repayment ability affected by the epidemic, and flexibly adjust their repayment plans by reasonably delaying repayment time, extending loan term and delaying repayment of principal. For taxi drivers, online shop owners, truck drivers and other flexible employment subjects, financial institutions can increase their business loan support according to individual industrial and commercial households and small and micro enterprise owners.

(5) Providing convenient financial market services. Financial market infrastructure should further optimize the issuance, trading, clearing, settlement and other services, provide a variety of service channels, adjust some business development methods, and strengthen service guarantee. China Association of Inter-bank Market Dealers and Inter-bank Market Clearing House Co., Ltd. should make use of the "green channel" established in the early stage to simplify business processes, moderately relax the requirements of information disclosure standards and increase support for bond issuing enterprises that are greatly affected by the epidemic.

(6) Ensuring the smooth flow of basic financial services. Strengthen cash management to ensure cash supply and cash safety and hygiene. Ensure the smooth operation of payment and clearing, liberalize the business limit of micropayment system as needed, extend the operation time of large-value payment system and central bank accounting data centralized system, and increase the guarantee of electronic payment services.

When necessary, financial institutions should handle the business of approving loans for enterprises by working in the nearest outlets and holding video conferences. It is necessary to effectively protect the rights and interests related to public credit investigation, and continue to implement the relevant provisions that overdue loans can be submitted without overdue records. Smooth online consultation and complaint handling channels for financial consumers.

It is necessary to establish a cooperative working mechanism of finance-taxation-treasury-bank, ensure the smooth channels of fund remittance, and ensure the timely disbursement of funds for epidemic prevention and control. The state treasury at all levels should implement the policy of value-added tax deduction and tax refund to help enterprises bail out. Smooth the channels for the disbursement and refund of tax refund funds, effectively ensure that tax refund funds reach market participants in a timely, accurate and safe manner, and promote market participants to enjoy policy dividends as soon as possible.

Second, give play to the role of finance in smoothing the circulation of the national economy, and do a good job in supporting the real economy policy by finance.

(seven) to do a good job in food security and financial guarantee for the production and marketing of important agricultural products. Make good use of the tools of refinancing and rediscounting to support agriculture, increase the amount of refinancing in a timely manner, and guide local corporate financial institutions to increase their support for agriculture-related entities. Differentiated credit support measures will be formulated around the whole industrial chain such as spring ploughing, grain circulation, storage and processing. Give play to the role of policy banks and ensure the supply of credit funds for central grain reserves in a timely manner. Encourage financial institutions to participate in grain market acquisition and actively meet the financial needs of acquisition and processing. Financial institutions should increase credit for the production, purchase, sale and processing of important agricultural products such as soybeans and oilseeds, and strengthen financial support for tackling key agricultural core technologies such as seed sources.

(eight) do a good job in financial services for the supply of energy such as coal. Optimize and support the special refinancing for clean and efficient use of coal, reasonably meet the needs of coal safety production and construction, power generation enterprises to buy coal, coal reserves and other fields, and ensure the stable supply of energy such as electricity and coal. Grasp the implementation of carbon emission reduction support tools, increase support for the transformation and upgrading of large-scale wind power photovoltaic bases and surrounding coal-fired power, and support the economic transformation to green and low carbon while ensuring the safety of energy supply.

(9) Increase financial support for the smooth circulation of logistics and shipping. Financial institutions should actively follow up and effectively meet the financing needs of transportation enterprises. Open up a "green channel" for transportation logistics enterprises that undertake epidemic prevention and emergency transportation tasks, optimize the credit approval process, and provide flexible and convenient financial services. For transport logistics enterprises and truck drivers who have temporary difficulties in repaying loans due to the epidemic, support financial institutions to scientifically and reasonably extend and renew loans. It is necessary to make good use of civil aviation emergency loans and other tools, and take measures to increase credit support for airlines and airports.

(ten) to strengthen the financial support of the core enterprises in the industrial chain supply chain. The establishment of scientific and technological innovation re-loans, to provide re-loan support for qualified scientific and technological innovation loans, and to guide financial institutions to increase their support for scientific and technological development and technological transformation of enterprises. Establish a credit and bond financing docking mechanism to guide financial institutions to quickly respond to the financing needs of the core of the industrial chain and supporting enterprises. Standardize the development of supply chain finance business, play the role of financial instruments such as supply chain bills and accounts receivable financing service platform, and support the financing of supply chain enterprises.

(eleven) increase financial support for effective investment. Development and policy banks should increase financial support for key investment projects in combination with their own business scope. Financial institutions should take the initiative to connect with major projects, increase support for projects that benefit people’s livelihood, short-board projects, fifth-generation mobile communication (5G), industrial internet, data centers and other new infrastructure construction in the fields of water conservancy, transportation, pipe network and municipal infrastructure, and promote the start of new projects as soon as possible to realize the physical workload. It is necessary to reasonably purchase local government bonds and support local governments to moderately advance infrastructure investment. Under the premise of controllable risks and compliance with laws and regulations, the reasonable financing needs of financing platform companies should be guaranteed according to the principle of marketization, and loans should not be blindly drawn, pressed or stopped to ensure the smooth implementation of projects under construction. Do a good job in financial support for private investment, government and social capital cooperation. The proportion of new loans from financial institutions to provinces (regions) with slow credit growth should increase steadily.

(twelve) actively support the healthy development of private enterprises. Adhere to the "two unwavering", and treat the state-owned economy and the private economy equally in financial policies such as loans and bond financing policies. Encourage financial institutions to build long-term cooperative relations with private enterprises, set annual service targets for private enterprises, fully meet the reasonable financial needs of the private economy, and further increase the proportion of private enterprise loans newly issued.

Give play to the leading role of the national financing guarantee fund, encourage qualified places to set up special funds or credit guarantee funds for loan risk compensation of private enterprises, and focus on providing credit enhancement services for first loans, reloans and renewals. Improve the financing support mechanism for private enterprise bonds and encourage financial institutions to increase investment in private enterprise bonds.

(13) Improve financial services in the housing sector. It is necessary to adhere to the positioning of "the house is for living, not for speculation", focus on the goal of "stabilizing land prices, housing prices and expectations", implement differentiated housing credit policies according to the city’s policies, and reasonably determine the minimum down payment ratio and minimum loan interest rate requirements for commercial personal housing loans within its jurisdiction, so as to better meet the reasonable housing needs of buyers and promote the stable and healthy development of the local real estate market.

Financial institutions should distinguish project risks from enterprise group risks, increase support for high-quality projects, do not blindly lend, cut off loans, and suppress loans, and do not engage in "one size fits all" to keep real estate development loans stable and orderly. Commercial banks and financial asset management companies should do a good job in financial services for mergers and acquisitions of key real estate enterprise risk disposal projects, carry out M&A loan business in a safe and orderly manner, increase financing support for M&A bonds, and actively provide financial advisory services for mergers and acquisitions.

On the basis of risk control, financial institutions should moderately increase support such as liquidity loans to meet the reasonable financing needs of construction enterprises, and do not blindly lend, cut off loans or pressure loans to maintain the continuous and stable financing of construction enterprises.

(fourteen) to guide the platform enterprises to carry out inclusive finance business in accordance with the law. On the basis of promoting the standardized and healthy development of online financial services of platform enterprises, we will give full play to the positive role of financial services of platform enterprises. Support platform enterprises to use Internet technology, optimize scene-based online financing products, and provide non-contact financial services to platform merchants and consumers. Encourage platform enterprises to give full play to their advantages in customer acquisition, data, risk control and technology, and increase support for the first loan and credit loan in the areas of agriculture, rural areas and farmers. Guide platform enterprises to steadily reduce the level of interest and fees, provide deferred debt service for loan customers affected by the epidemic, and maximize the benefits to enterprises and the people. Supervise platform enterprises to standardize business cooperation with financial institutions, empower financial institutions to accelerate digital transformation, and improve the efficiency and coverage of financial services.

(fifteen) to strengthen financial services to key consumer areas and new citizen groups. We will set up special refinancing loans for inclusive pension, provide refinancing support for eligible inclusive pension loans, and increase financial support for inclusive pension institutions. Guide financial institutions to standardize the development of consumer credit products and services, and increase support for medical and health care, old-age care, cultural tourism, new consumption, green consumption, county rural consumption and other fields. Encourage financial institutions to enrich large-scale consumer financial products such as automobiles to meet the demand for reasonable consumption funds.

Financial institutions should make good use of the business guarantee loan policy, enrich the supply of credit products around the entrepreneurial form, income characteristics and capital needs of new citizens, reduce the financing cost of new citizens, and stimulate the entrepreneurial employment vitality of new citizens. Actively innovate financial products and services for new citizens’ consumption, vocational skills training, children’s education, health insurance, old-age security, housing and other fields, and enhance the equality and convenience of basic financial services.

Third, optimize the handling of foreign exchange and cross-border RMB business to promote the steady development of foreign trade exports.

(sixteen) to improve the level of trade facilitation. We will promote the facilitation policy of foreign exchange receipts and payments of high-quality enterprises to the whole country, steadily carry out a pilot project of RMB settlement facilitation of trade and investment at a higher level, and encourage banks to include more high-quality small and medium-sized enterprises in the scope of facilitation policies. Further broaden the settlement channels, support qualified non-bank payment institutions and banks to provide efficient and low-cost cross-border fund settlement services for cross-border electronic commerce, foreign trade integrated services and other market entities related to new trade formats by trading electronic information.

(seventeen) to facilitate enterprises to carry out cross-border financing. Support qualified high-tech and specialized small and medium-sized enterprises to carry out pilot projects of foreign debt facilitation quota. Further facilitate enterprises to borrow foreign debts, and support non-financial enterprises to share a foreign debt account for multiple foreign debts. Support enterprises to apply for foreign debt registration online. Eligible non-financial enterprises in the pilot areas can directly handle foreign exchange registration of foreign debts and other capital projects in banks according to regulations.

Domestic foreign exchange loans with trade and export background are allowed to be used for settlement of foreign exchange, and enterprises should repay them with trade and export proceeds in principle. If an enterprise fails to collect foreign exchange on schedule due to special circumstances and there is no foreign exchange fund to repay domestic foreign exchange loans with trade and export background, the lending bank may go through the formalities of purchasing foreign exchange for the enterprise in accordance with regulations. Financial institutions should actively innovate trade financial products, improve the service level of trade financing, and provide necessary financial support for enterprises’ import and export trade.

(eighteen) improve the exchange rate risk management services of enterprises. Financial institutions should promptly respond to the exchange rate hedging needs of foreign trade enterprises and other market entities, support enterprises to expand cross-border RMB settlement, optimize the management and services of foreign exchange derivatives business, and reduce the cost of hedging. Encourage qualified areas to strengthen cooperation between government, banks and enterprises, explore and improve the cost sharing mechanism of exchange rate hedging, expand the government financing guarantee system to provide enterprises with trade financing and exchange rate hedging business guarantees, and enhance the ability of enterprises to cope with exchange rate fluctuations. China Foreign Exchange Trading Center exempts small and medium-sized enterprises from handling fees related to foreign exchange derivatives transactions in the inter-bank foreign exchange market.

(nineteen) optimize the cross-border business process and services. To further improve the digitalization level of cross-border business, banks can provide cross-border settlement services through online and paperless methods such as reviewing electronic documents. Banks should improve the efficiency of cross-border collection and payment under the current account of enterprises. Encourage banks to enrich RMB investment and financing products and facilitate enterprises to use RMB in foreign economic and trade activities and international cooperation.

(twenty) increase the support of export credit insurance. Give play to the role of export credit insurance in enhancing credit guarantee, guide insurance institutions to provide financial services to small and medium-sized micro-foreign trade enterprises, and further improve the efficiency of insurance claims. Deepen the four-way cooperation between government, insurance, banks and enterprises, provide richer cross-border trade background information and more convenient verification services through the application scenario of "export credit insurance policy financing" of cross-border financial service platform, accurately serve foreign trade enterprises, and expand the scale of policy financing.

(twenty-one) to enhance the convenience of investors’ cross-border investment and financing. Promote unified access standards for inter-bank and exchange bond markets, simplify the market entry process, and improve the fund management of foreign investors investing in the domestic bond market. Optimize the management of funds for issuing bonds (panda bonds) in China by overseas institutions, and domestic affiliated enterprises of panda bond issuers can borrow relevant panda bond funds according to the principle of actual needs. Further facilitate qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) to handle the registration of domestic securities and futures investment funds.

Fourth, strengthen the party’s leadership and enhance the long-term sustainability of policies and the effect of policy propaganda.

(22) Give full play to the leading role of Party building. The People’s Bank of China, all units in the foreign exchange bureau system and all financial institutions should improve their political stance, unify their thoughts and actions with the decision-making and deployment of the CPC Central Committee and the State Council, adhere to the principle of putting people first and life first, earnestly regard the overall prevention and control of epidemic situation and economic and social development as a major political task at present, strengthen organizational leadership, implement relevant policies, and do their best to provide financial services.

(23) Strengthen the sustainability of financial support. Financial institutions should adhere to the principles of marketization and rule of law, comprehensively consider factors such as profit, provision and write-off, independently review loans, make independent decisions, take risks at their own risk, and continue to do a good job in financial support. It is necessary to guard against moral hazard, strengthen the monitoring of capital flow and risk, and ensure that enterprises use funds legally and rationally. All units of the People’s Bank of China and the foreign exchange bureau system should solve the pain and difficulty of policy landing, actively respond to the reasonable demands of financial institutions and market entities, and improve the long-term mechanism for policy landing. It is necessary to increase policy propaganda through the media and the Internet to ensure that policies benefit market players in a timely manner.

China People’s Bank State Administration of Foreign Exchange

April 18, 2022