Info of foreign borrowers to be included in China’s credit system
April 30, 2019 Category China News Round-up, Weekly
Foreign borrowers’ financial information will be recorded in China’s national credit system, and the People’s Bank of China (PBOC) is studying the feasibility of a cross-border information sharing mechanism to improve services for foreigners and prevent credit risks. Foreigners wishing to borrow money from financial institutions in China should register their nationality on personal credit reports, a new requirement of the PBOC, said Wang Xiaolei, Deputy Director of the PBOC Credit Reference Center. The central bank will notify foreigners before collecting the additional information, she said. Chinese financial institutions need to know about foreign borrowers’ previous credit records, including such activities in other countries, and to rate their credit history before issuing loans. Changes to the national credit system are being worked out.
The PBOC released a statement indicating that more credit information will be included in the system in order to accurately assess credit risks and minimize defaults. The information will cover payment history of utility bills, loans jointly borrowed by more than one person, and guarantee arrangements between individuals and corporations. The PBOC’s updated credit information system will help improve accuracy of information used by banks in their credit decision-making processes, Nicholas Zhu, Vice President and Senior Banking Analyst at Moody’s, told China Daily.
The national credit information database was launched in 2006, and is managed by the PBOC. It now covers information on 259.18 million enterprises and 990 million individuals. The central bank has issued a license to Baihang Credit, China’s only licensed market-based personal credit agency, to expand the system to all of society, including consumer credit information. Baihang uses big-data digital technology to process activities such as mobile phone usage, travel, locational data and purchasing history, the China Daily reports.
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