SHANGHAI (Reuters) - China issued proposed new guidelines on Tuesday aimed at tightening rules and standardising criteria for granting car loans, in a move to address concerns over the risk of borrowers defaulting.
Car loans have soared in recent years partly as a result of financing deals offered by automakers to boost sales. Nearly 30 percent of purchases were made on credit last year, up from 20 percent in 2013 , according to analysts from Sanford C. Bernstein and Deloitte.
The People's Bank of China issued the revised guidelines on its website and sought feedback from the public by Jan. 27.(http://www.pbc.gov.cn).
In future, the PBOC said borrowers must provide valid guarantees, and lenders will have to establish a credit rating system and use independent external credit rating facilities to assess a customer's creditworthiness.
