China Issues Trial Rules Requiring Lead Banks for Commercial Property Loans

China's National Financial Regulatory Administration has issued trial measures for commercial property loans, requiring each project to designate one lead bank. The lead bank may lend alone or through a syndicated loan structure and must take responsibility for due diligence, project review, information sharing, fund management and post-loan supervision, according to Jiemian News. The rules say commercial property loans must be managed on a project-by-project basis with separate accounts, closed-loop fund management and no mixing of project funds. Loans may be used for the construction, purchase and operation of commercial property, including commercial complexes, shopping centers, office buildings, hotels and cultural tourism property projects, but must stay within the same city. The measures also set loan terms of up to seven years for development loans, up to 10 years for purchase loans and up to 15 years for operating-property loans, while requiring stricter collateral, capital and monitoring standards.