In the context of strict inspections of credit card funds flowing into the property market, commercial banks are gradually escalating their control over credit card transactions with real estate merchants. After the Agricultural Bank of China lowered the limit on credit card swiping at real estate merchants, Industrial Bank recently issued an announcement stating that overdraft transactions with its credit cards at four types of real estate merchants are not allowed. Analysts pointed out that the tightening of credit card control is not only a policy reason for real estate regulation, but also a prelude to strengthening credit card risk control.
Restrict credit card housing-related transactions through multiple channels
The Industrial Bank Credit Card Center recently issued the "Announcement on Adjusting the Management of Transaction Limits for Certain Categories of Merchants" stating that according to the requirements of the regulatory authorities, the bank's credit card Overdraft transactions are not allowed at real estate merchants (merchant category codes are 1520, 7013, 7012, and 1771). At the same time, restrictions are set on overdraft transactions at property merchants (merchant category code is 6513).
It is reported that the above-mentioned multiple business category codes related to credit cards and real estate are residential and commercial real estate development (merchant category code 1520), real estate agency and brokerage (merchant category code 7013), and real estate construction and installation engineering (Merchant Category Code 1771), real estate management (Merchant Category Code 6513), rental and other vacation real estate (Merchant Category Code 7012).
At the end of August, Agricultural Bank of China and Ping An Bank successively issued announcements announcing the strengthening of restrictions on credit card transactions at real estate merchants. Among them, the Agricultural Bank of China stipulates that the daily cumulative transaction limit of the bank's credit cards at domestic real estate merchants (merchant category codes are 6513, 1771, and 7012) will be reduced from 30,000 yuan to 15,000 yuan, and the annual cumulative transaction amount shall not exceed 50,000 yuan. The Agricultural Bank of China also emphasized that its credit cards are not allowed to be used for transactions at domestic real estate merchants (merchant category codes are 1520 and 7013).
It is worth mentioning that the biggest restriction on Agricultural Bank of China’s adjustment this time is the annual cumulative limit. Previously, the cumulative transactions in the year could not exceed 200,000 yuan, but this time the limit is only 50,000 yuan.
Ping An Bank issued an announcement stating that in order to implement policies related to real estate regulation and regulations, it has set restrictions on real estate merchants. When holders of the bank’s credit cards spend overdrafts at such merchants, it may lead to transactions. fail. Prior to this, Ping An Bank required that when credit cards are used for transactions with domestic real estate merchants, the transaction limit for a single month (natural month) is adjusted from 30,000 yuan (inclusive) to 10,000 yuan (inclusive), and the cumulative limit for the entire year (natural year) is 10 Ten thousand yuan (inclusive).
According to a survey by a Beijing Business Daily reporter, China Construction Bank, Minsheng Bank, etc. have previously not supported credit card transactions at real estate merchants; Bank of Communications, Bohai Bank, Zhongyuan Bank and other banks have also successively adjusted credit card real estate transactions. Merchant’s card transaction limit.
Huang Dazhi, a senior researcher at Suning Financial Research Institute, said that the bank’s document restricting credit card real estate merchant transactions is a policy response to regulatory control of the property market. One of the important means of regulating the property market is to control the inflow of funds into the property market. By controlling credit card real estate merchant transactions, we can effectively control the inflow of credit funds into the property market.
Beware of “using cards to support loans”
In fact, there have always been controls on the inflow of credit card funds into real estate. For example, Ping An Bank once issued a document saying that since October 26, 2018 Starting from , real estate transactions (principal, fees, interest) using this bank’s credit card will be fully included in the minimum repayment amount. Staff from the credit card customer service centers of China Merchants Bank and Shanghai Pudong Development Bank stated that real estate merchant transactions do not support installment repayment and must be repaid in full at once.
Regarding the recent phenomenon of many banks adjusting their credit card housing-related transaction rules, Dong Zheng, a senior researcher in the credit card industry, believes that on the one hand, it is the policy reason for the tightening of real estate regulation and supervision, and on the other hand, more importantly, the following The prelude to half-year credit card risk control.
After recent years of turf racing, my country’s credit card business has achieved leapfrog development. According to data released by the central bank, as of the end of the second quarter of 2019, the number of credit cards and debit and credit cards in use totaled 711 million, a month-on-month increase of 3.04%. Compared with 142 million at the end of the fourth quarter of 2008, the number of credit card issuances has increased by more than 4 times after more than ten years of development.
As the number of card issuances increases, the risk of bad debts of credit cards has also increased.
Data show that as of the end of the second quarter of 2019, the total amount of bank card credit was 16.32 trillion yuan, a month-on-month increase of 3.23%; the total outstanding credit card credit card overdue for six months was 83.884 billion yuan, accounting for 1.17% of the credit card payable balance, accounting for 1.17% of the credit card payable balance compared with the previous quarter. At the end of the year, it increased by 0.02 percentage points.
In the semi-annual reports of banks that disclosed credit card non-performing situations, the non-performing ratios of many banks have increased compared with the beginning of the year. For example, as of the end of June 2019, the credit card non-performing ratios of Bank of Communications and Shanghai Pudong Development Bank had exceeded 2%, which were 2.49% and 2.38% respectively, up 0.97 and 0.57 percentage points respectively from the beginning of the year; China Construction Bank, Industrial Bank, China Merchants Bank, Ping An Bank's credit card non-performing rates also rose to 1.21%, 1.26%, 1.3% and 1.37% respectively.
Industry insiders pointed out that factors such as external economic uncertainty, economic downward pressure, and risks brought by bank debt problems have led to a gradual increase in credit card non-performing rates. Li Xin, a researcher at Minsheng Bank Research Institute, said that on the one hand, the household sector's leverage ratio has increased, and some people may be overloaded with loans due to buying a house or other reasons, so that they have to keep using their cards to support their loans, which is actually a short-term loan for long-term use. Term mismatch; on the other hand, to rectify financial chaos, the explosion of P2P platforms has caused risks to the credit card business.
“Although some banks have taken the initiative to adjust their credit card business, and regulators have also issued policies to provide regulatory guidance for the business. However, affected by factors such as the downturn of the real economy, strong financial supervision, and early aggressive strategies, in the second half of the year A slight increase in credit card non-performing rates is still a high probability event," Huang Dazhi pointed out.
Strengthening the control of capital flows
Many banks have set restrictions on credit card housing-related transactions, which can be regarded as a continuation of previous tightening policies on consumer loans. In early August, the General Office of the China Banking and Insurance Regulatory Commission issued an announcement and decided to carry out special inspections of bank real estate businesses in 32 cities. This special inspection severely investigated and dealt with illegal activities such as personal comprehensive consumption loans, "down payment loans", credit card overdrafts and other illegal activities such as misappropriation of funds for home purchases.
Yan Yuejin, Research Director of the Think Tank Center of E-House Research Institute, said that banks are currently escalating their efforts to prevent financial risks. Some banks that lend money in violation of regulations are likely to face control and punishment in the near future, so in fact, they will all Bank business regulations put forward new requirements. Judging from the actual process, credit cards often become an important channel for real estate flows because they are easy to swipe and some have large credit limits. Therefore, controlling credit cards itself is also a manifestation of the content of housing for housing and not for speculation.
It is worth mentioning that credit cards, especially large-deposit credit cards, have become an important product type for banks. If a customer withdraws his or her credit limit in cash, it is difficult for the bank to track the specific flow of funds. In this regard, Huang Dazhi believes that credit cards are a powerful tool to stimulate consumption, and the per capita credit card holding rate is also at a low level, and the risks have not increased significantly. Comprehensive and strict supervision should be a small probability event, and the focus of supervision is more Control over the flow of funds.
“Credit card applications are not very censored, so we must prevent one person from applying for multiple cards, misappropriating other people’s credit cards, etc. The key in the future is to set credit limits for some funds with larger amounts. Records, if it is used in the real estate field in violation of regulations, the credit score will be lowered in the future," Yan Yuejin further said.