PBoC & SAFE Announce: Raising Overseas Loan Leverage Ratio for Certain Banks

PBoC and SAFE Joint Notice on Adjusting Overseas Lending Business for Banking Institutions

The People's Bank of China (PBoC) and the State Administration of Foreign Exchange (SAFE) issued Notice No. 72 [2026] on April 11, 2026, adjusting the overseas loan leverage ratio for certain banking institutions.

Key Changes

First: The overseas loan leverage ratio for wholly foreign-owned banks, Sino-foreign joint venture banks, and branches of foreign banks operating in mainland China has been raised from 0.5 to 1.5. Financial institutions from Hong Kong, Macao, and Taiwan operating in the mainland are subject to the same treatment. The leverage ratio for the Export-Import Bank of China has been increased from 3 to 3.5. If the calculated overseas loan balance ceiling falls below 10 billion yuan, the bank's overseas loan balance cap shall be set at 10 billion yuan.

Second: For loans with tenor exceeding one year that domestic banks extend indirectly to overseas enterprises by lending funds to offshore banks, the offshore bank may process such lending in accordance with relevant laws and regulations of its home country or region.

Rationale

In recent years, banks' overseas lending business has grown steadily, with the proportion of RMB-denominated loans continuously rising. This has played an active role in supporting the overseas operations of Chinese enterprises expanding abroad. However, some banks have raised concerns regarding loan balance ceilings and usage management. After thorough research and consultation with banking institutions, the PBoC and SAFE jointly issued this Notice to optimize the policy framework.

This adjustment will better support foreign-funded banks and the Export-Import Bank in leveraging their business advantages while meeting the reasonable financing needs of overseas enterprises, according to officials from both regulators.

(Source: Central Bank Website)