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Beijing's personal bank loan consumer credit information system is expected go into effect some time this month, sources from the Beijing Banking Industry Association revealed.
A spokesman for the association, composed of 21 domestic member banks and 18 foreign ones, said that establishment of the system is to deal with the ever-increasing volume of bank loans and to help banks minimize loan risks.
After the establishment of a credit information collection system, all member banks will be required to submit their clients' credit records, and this information will be made available to all members free of charge.
"It will help ensure that banks in the capital city can get convenient and accurate credit information on their clients to help them avoid possible bad loans," said the spokesman.
"Or, putting it the other way round, citizens with bad credit records will not be able to go to other banks to get loans, which will not only reduce risk for the banks but also encourage clients to honor their commitments to the banks."
According to the association, the credit information system will first cover automobile loans, with information collection on automobile loans going into effect tomorrow.
"This is being done because automobile loans in the city have been increasing dramatically in recent years and member banks are moving to cover auto loans first because of the high risk involved," said the spokesman.
Official statistics showed that the total volume of automobile loans exceeded 20 billion yuan (US$2.4 billion) by the end of the first half of this year. Insurance companies have also become wary of the automobile loan market because of the high risk involved.
(China Daily October 9, 2003)
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