China Banks Raise Consumer Loan Interest Subsidy Cap to RMB 5,000 a Year

China Construction Bank, Industrial and Commercial Bank of China and other large state-owned banks, together with a number of city commercial banks and other small and medium-sized financial institutions, have recently issued notices explaining issues of customer concern in the fiscal interest subsidy policy for personal consumer loans, including credit card instalments. Several banks stated in their notices that the cumulative annual subsidy cap per borrower for personal consumer loans and credit card instalment business rises from RMB 3,000 to RMB 5,000. The scope of the subsidy expands from credit card bill instalments to special instalments, consumer instalments, cash advance instalments and other instalment products. For credit card instalments other than bill instalments, the subsidy policy applies from August 1, 2026 to December 31, 2026.

To reduce personal consumption costs, the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration issued a notice in January 2026 on optimizing the implementation of the fiscal interest subsidy policy for personal consumer loans, bringing credit card bill instalment business into the support scope and adding subsidy handling institutions. City commercial banks, rural cooperative financial institutions, foreign-funded banks, consumer finance companies and auto finance companies with a regulatory rating of 3A or above were included in the local subsidy policy handling institutions, expanding the policy's coverage. The Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration also recently issued a notice on further improving the coordination of fiscal and financial policies to boost domestic demand.

Some banks have published specific implementation arrangements. Bank of Nanjing offers interest rate discounts on credit card instalments, with fiscal subsidy funds directly offsetting interest when users repay. Kecheng Rural Commercial Bank, under Zhejiang Rural Commercial United Bank, has introduced scenario-based benefits such as instant discounts and instalment purchases on top of the credit card bill instalment subsidy. Credit card instalments can be embedded in goods and services transaction scenarios, and against the backdrop of promoting financial services at the county level to boost consumption, many small and medium-sized banks in various regions have taken measures to enhance the appeal of credit cards.

The higher subsidy cap does not change the loan amount available to consumers, nor does it change banks' credit approval standards. If fraud, false consumption, diversion of funds into non-consumption areas or other illegal or non-compliant acts stipulated by relevant national policies occur during credit card use, or if consumption transaction refunds or overdue repayments occur, fiscal interest subsidies will not be granted in accordance with regulations; for subsidies already received, banks have the right to deduct or recover the subsidy funds in an appropriate manner.