Companies with poor environmental records in China now risk being rejected for bank loans.
Banks are to adopt a more selective policy, being encouraged by China’s
central bank and the environment administration, after a government
threat to halt industrial projects that contravene state environmental
policies.
Stopping projects would create risks for banks that have loaned the
funds and they could suffer losses, pointed out Dai Genyou, director of
the central bank’s credit management bureau.
To protect themselves commercial banks will be able to make checks
through a new credit system showing companies’ environmental
performance and could refuse finance if a record is unsatisfactory.
Su Ning, the central bank’s deputy governor, said: ‘This will encourage
enterprises to think more about the effect their operations have on the
environment.’
