China’s Central Bank Launches Special Re-Lending Facility

China’s central bank on Friday launched a special re-lending facility to guide banks to provide loans to listed companies and their major shareholders for buybacks and increasing shareholdings.

The People’s Bank of China (PBOC) announced the decision last month to set up the re-lending facility and the Securities, Funds and Insurance Companies Swap Facility as part of efforts to support the healthy and steady development of the capital market.

Starting from Friday, 21 national financial institutions can issue relevant loans to qualified listed companies and major shareholders, and apply to the PBOC for re-lending in the first month of the next quarter. For loans that meet the requirements, the PBOC will provide re-lending support at 100 percent of the loan principal.