Agricultural Bank of China is getting ahead of the mainland lending pack to offer discounted mortgage rates from August 1, sina.com reported Thursday.
Applicants at the bank’s Shanghai branch for housing loans of over 2 million yuan (US$324,000) will be offered a 5 percent discount on the benchmark interest rate, the reported quoted a client manager in Shanghai as saying.
But if the applicant doesn’t meet the bank’s rating criteria, he or she could be charged 5 percent more than the benchmark rate, the report said.
Other big banks such as Industrial & Commercial Bank of China have yet to offer similar discounts, the report said.
The preferential mortgage rate is seen as a prelude to further relaxation of once rigid control over the big four banks’ mortgage rates. The move came after Premier Li Keqiang urged financial institutions to lower financing costs for the real economy Wednesday.
Central bank statistics chief Sheng Songcheng said last Friday that the government will “further” press ahead with market reforms of interest rates.
Central bank governor Zhou Xiaochuan is on record as saying that China plans to liberalize interest rates within two years but the exact timing will depend on domestic and global economic conditions.
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