The financial discount policy for equipment renewal loans is coming!

Notice on the implementation of the financial discount policy for equipment renewal loans

Cai Jin [2024] No. 54

Finance departments (bureaus), development and Reform Commissions of all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate planning status, the Finance Bureau and Development and Reform Commission of the Xinjiang Production and Construction Corps, local supervision bureaus of the Ministry of Finance, the Shanghai headquarters of the People's Bank of China, branches of all provinces, autonomous regions, municipalities directly under the Central Government and cities with separate planning status, the regulatory bureaus of the State Administration of Financial Regulation, and relevant financial institutions:

Promoting large-scale equipment renewal and trade-in of consumer goods is an important measure to accelerate the construction of a new development pattern and promote high-quality development. In order to implement the decisions and arrangements of the Party Central Committee and the State Council, in accordance with the relevant requirements of the Notice of the State Council on Printing and Distributing the Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods (Guo Fa [2024] No. 7), the Central Finance Department will implement the financial discount policy for equipment renewal loans in conjunction with relevant parties. The relevant matters are hereby notified as follows:

1. Policy content

(1) Scope of support. If the business entity implements the equipment renewal action in accordance with the requirements of the Notice of the State Council on Issuing the Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in (Guo Fa [2024] No. 7), which is included in the list of alternative projects determined by the relevant departments, and the loan issued by the bank to it is supported by the People's Bank of China related re-lending related to equipment renewal, the central finance will discount the bank loan of the business entity. The list of alternative projects shall be determined through consultation between the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Transport, the Ministry of Agriculture and Rural Affairs and other departments.

(2) Interest discount standards. If the loans granted by banks to business entities meet the conditions for re-loan reimbursement, the central government shall discount the principal of bank loans to business entities by 1 percentage point. The interest will be discounted according to the date on which the relevant loan funds are transferred to the supplier's account, and the interest discount period shall not exceed 2 years.

(3) Time limit conditions. During the period from the date of issuance of the Notice of the State Council on Printing and Distributing the Action Plan for Promoting Large-scale Equipment Renewal and Trade-in of Consumer Goods (Guo Fa [2024] No. 7) (March 7, 2024) to December 31, 2024, if a business entity signs a loan contract, equipment purchase or renovation service procurement contract, and the relevant loan funds are disbursed to the business entity and transferred to the supplier's account, it can enjoy the interest discount policy. Combined with the use of refinancing lines related to the equipment renewal of the People's Bank of China, the policy implementation period can be extended according to the situation.

2. Loan process

(1) The scope of the bank handling the loan. The central government has provided 21 national banks with subsidized loans for equipment renewal, including China Development Bank, Export-Import Bank of China, Agricultural Development Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank of China, China CITIC Bank, China Everbright Bank, Huaxia Bank, Minsheng Bank, China Merchants Bank, Industrial Bank, Guangfa Bank, Ping An Bank, Shanghai Pudong Development Bank, Hengfeng Bank, Zheshang Bank and Bohai Bank.

(2) Loan application. If the business entity implements equipment renewal, which is included in the list of alternative projects determined by the relevant departments, it can submit an application for equipment renewal loan to the relevant handling bank where it is located, and provide relevant supporting materials as required.

(3) Loan review and disbursement. With reference to the list of alternative projects determined by the relevant departments, the handling bank shall review and approve the loan applications of the business entities in accordance with the principle of marketization, make independent decisions on whether to issue loans and the conditions for granting loans, and approve and disburse loans in a timely manner for eligible applications.

3. Interest discount process

(1) Pre-allocated interest discount funds. The "two pre-allocation" mechanism is implemented for the loan discount funds. The Ministry of Finance shall pre-allocate transfer payment funds to the financial departments of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan, and the Xinjiang Production and Construction Corps (hereinafter collectively referred to as provincial-level financial departments) for loan interest discounts. The provincial-level financial department implements the financial discount policy through the handling bank, and allocates the discount funds to the provincial branch of the handling bank on a quarterly basis. Subsequently, according to the actual expenditure and fund review, the discount funds will be settled according to the facts. After receiving the subsidy funds from the financial department, the handling bank shall deduct the interest at the time of collection.

(2) Application for subsidized funds. The provincial-level branch of the handling bank summarizes the loans issued on a quarterly basis and submits an application for discounted funds to the local provincial-level financial department. Within 5 working days after receiving the application for interest discount funds from the handling bank, the provincial finance department shall allocate 80% of the interest discount fund demand of a quarter to the provincial branch of the relevant handling bank.

(3) Review of discounted funds. The prefecture-level branch of the handling bank shall submit an application for subsidized funds to the local prefecture-level finance department on a quarterly basis, and attach the loan contract, purchase invoice, and relevant supporting materials of the business entity. The prefectural and municipal finance departments shall review the materials in conjunction with the relevant departments at the prefectural and municipal levels, among which the relevant departments at the prefectural and municipal levels shall be responsible for reviewing whether the loans meet the scope of the list of alternative projects and other review requirements determined by the National Development and Reform Commission and the relevant national industry authorities; The People's Bank of China Prefecture and City Branches are responsible for providing a list of reloans. The municipal finance department shall submit the audit results and relevant information to the provincial finance department within 1 month after the end of the quarter.

(D) the financial sector and the handling bank discount fund settlement. The provincial finance department is responsible for summarizing and verifying the eligible subsidized loans, and after receiving the audit results and relevant information from the municipal finance department, it shall submit the application for the review of the subsidized funds to the local supervision bureau of the Ministry of Finance within 10 working days. The local supervision bureau of the Ministry of Finance shall feedback the review opinions to the provincial finance department within 10 working days after receiving the application for review of the subsidized funds. For the subsidized loans reviewed and approved by the local supervision bureau of the Ministry of Finance, the provincial finance department shall allocate the remaining 20% of the subsidized funds in the relevant quarter within 10 working days. For interest-discounted loans that are not approved by the local supervision bureau of the Ministry of Finance, the provincial-level finance department shall recover or deduct the discounted funds. The handling bank shall give feedback to the business entity in a timely manner on the review of the discount funds.

(5) Settlement of central and local discount funds. During the implementation of the policy, before the end of February each year, the provincial finance department shall submit to the Ministry of Finance the application report for the settlement of the discount funds of the previous year and the report on the demand for the discount funds of the current year, and send a copy to the local supervision bureau of the Ministry of Finance. The local supervision bureau of the Ministry of Finance shall review the application report for the settlement of the subsidized funds in a timely manner, and issue the audit opinions of the subsidized funds before the end of March and submit them to the Ministry of Finance. The Ministry of Finance shall settle the previous year and allocate the interest discount funds of the current year according to the settlement application report of the provincial financial departments and the review opinions of the local supervision bureaus of the Ministry of Finance, combined with the budget arrangements and the pre-allocated interest discount funds.

(6) Liquidation of discounted funds. After the expiration of the policy, in principle, the provincial finance department shall summarize the application for the liquidation of the subsidized funds of the handling bank within one month, submit the liquidation report of the subsidized funds to the Ministry of Finance after review, and send a copy to the local supervision bureau of the Ministry of Finance. Within one month of receiving the liquidation report, the local supervision bureau of the Ministry of Finance shall issue a review opinion on the liquidation of discounted funds and submit it to the Ministry of Finance. The Ministry of Finance shall liquidate the discounted funds with the provincial financial departments in a timely manner according to the liquidation reports of the provincial financial departments and the audit opinions of the local supervision bureaus of the Ministry of Finance.

Fourth, supervision and management

(1) Ensure that the funds are earmarked. The business entity shall ensure that the loan funds are used exclusively for equipment renewal and technological transformation, and it is strictly forbidden to make false claims, fraudulently claim, arbitrage, intercept, crowd out, and misappropriate loan funds, and it is strictly forbidden to use the loan funds to repay other debts of the enterprise or arbitrage activities such as investment and wealth management. For those that have not been used for equipment renewal and technological transformation, once discovered, the qualification for preferential policy support will be cancelled, the central financial discount funds will be recovered, and the corresponding responsibilities will be investigated in accordance with laws and regulations.

(2) Consolidate the responsibilities of all parties. To consolidate the responsibility of handling banks for loan review, it is necessary to strictly examine and approve, reasonably match preferential credit lines, issue loans quickly, strengthen post-loan management, and ensure that loan funds are used for equipment renewal and technological transformation in relevant fields. Relevant departments should strictly control the project to ensure that the project meets the scope of the project list and other review requirements. The dispatched agencies of the State Administration of Financial Supervision should strengthen daily supervision, urge the handling banks to review the use of funds and track the actual use of loans, so as to ensure the compliance and effective use of loan funds.

(3) Strengthen fund management. Departments such as finance, development and reform, industry supervisors, and the People's Bank of China should promptly share information such as financial interest discounts, a list of alternative projects, and a list of reloans. The financial department should speed up the progress of the allocation of interest discount funds, improve the quality and efficiency of the audit, and support the accurate implementation of policies. The local supervision bureaus of the Ministry of Finance should strengthen supervision and management, increase the intensity of examination and control, and promote the standardized management and use of financial discount funds. Provincial-level financial departments shall, in conjunction with relevant departments, establish monthly accounts for interest discount work, and timely grasp the use of special loans and financial discount funds.

(4) Strict liability. Relevant departments should strengthen the tracking and management of the whole process, and if it is found that the loan funds are not used in accordance with the policy provisions and the contract, the relevant credit funds and the central financial discount should be recovered in a timely manner, and the business entities and handling banks should be punished in accordance with laws and regulations. Relevant business entities and handling banks should consciously accept audit supervision and supervision by relevant departments. If the staff violates the requirements of this notice and other violations of law and discipline such as abuse of power, dereliction of duty, favoritism, etc., the corresponding responsibility shall be pursued in accordance with law; and where a crime is suspected, it shall be transferred to the relevant organs for handling in accordance with law.

5. Other matters

(1) Before July 10, 2024, the provincial finance department shall submit the application report and calculation table of the demand for interest discount funds to the Ministry of Finance for this year, and the Ministry of Finance shall pre-allocate the discount funds according to the budget arrangements and the application submitted by various localities and settle them in the next year.

(2) Relevant parties should attach great importance to it, and if there are any problems in implementation, please report them in a timely manner.

treasury

National Development and Reform Commission

People's Bank of China

General Directorate of Financial Supervision

June 21, 2024

Source: WeChat of the Ministry of Finance