The China Development Bank signed a contract to extend 1.63 billion Yuan (240 million U.S. dollars) in acquisition loan to the CITIC Guo'an Group, the first deal after the green light for banks to grant acquisition loan last month. The CITIC Guo'an would use the loan to increase its shareholding in the Baiyin Group, a non-ferrous metal processing company in northwest China's Gansu Province.
The China Banking Regulatory Commission (CBRC) allowed commercial banks to provide loans to domestic enterprises for acquisition both at home and abroad, starting from December of 2008. Commercial banks, including domestic urban and rural commercial banks and foreign-funded banks, must meet certain criteria to initiate the business including a more than 10% capital adequacy ratio and a loan loss provision taking up more than one percent of the total loan, among others. (Feb 27th 2009)