On April 15th, in order to better serve the real economy and promote trade and investment facilitation, the People's Bank of China and the State Administration of Foreign Exchange issued the "Notice on Adjusting the Overseas Loan Business of Banking and Financial Institutions" (hereinafter referred to as the "Notice"). The notice has made two adjustments, one is to increase the upper limit of overseas loan balance; The second is to optimize the requirements for indirect loan management. The Notice specifies that the overseas loan leverage ratio of domestic wholly foreign-owned banks, domestic Sino foreign joint venture banks, and domestic branches of foreign banks will be raised from 0.5 to 1.5, and financial institutions in Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan will apply accordingly to banking institutions established in mainland China. Raise the overseas loan leverage ratio of the Export Import Bank from 3 to 3.5, and increase the upper limit of overseas loan balance from 2 billion yuan to 10 billion yuan. In terms of optimizing the management requirements for indirect loans, the "Notice" proposes that if domestic banks indirectly issue domestic and foreign currency loans of more than one year to overseas enterprises through methods such as lending funds to overseas banks, they can be handled by overseas banks in accordance with relevant laws and regulations of their country or region. In 2022, the People's Bank of China and the State Administration of Foreign Exchange issued the "Notice on Matters Related to Overseas Loan Business of Banking and Financial Institutions", establishing a policy framework for integrated management of domestic and foreign currencies and priority given to domestic currency for overseas loans of banks. The heads of relevant departments of the People's Bank of China and the State Administration of Foreign Exchange stated that in recent years, the overseas loan business of banks has been steadily and orderly carried out, the scale of overseas loans has steadily increased, and the proportion of RMB loans has been continuously increasing, playing a positive role in supporting the overseas operations of "going global" enterprises. At the same time, some banks have raised some issues and demands regarding loan balance limits, usage management, and other aspects. The People's Bank of China and the State Administration of Foreign Exchange, based on thorough research and consultation with banks, jointly issued a notice to adjust and optimize relevant regulations. The reason why the two departments chose to adjust at this time is that the current two-way fluctuation of the RMB exchange rate has shown strength. Moderately relaxing the leverage ratio of overseas loans can help guide the orderly outflow of funds, stabilize the pressure of exchange rate appreciation, and maintain the balance of supply and demand in the foreign exchange market. ”Pang Ming, a specially appointed senior researcher at the National Finance and Development Laboratory, said that more importantly, this is highly in line with the current pace of China's new quality productivity going global. Since 2026, Chinese enterprises have entered an accelerated period of global industrial chain layout, and urgently need domestic financial institutions to provide more flexible cross-border financial support. (New Society)