Aug 21, 2026 (InvestinChina.asia) – Several of China’s largest banks have moved swiftly to implement a newly expanded loan subsidy program, with Agricultural Bank of China and Bank of China raising the annual interest subsidy cap for consumer loans and credit card installments to 5,000 yuan ($684) per borrower, up from 3,000 yuan previously.
The adjustments follow a joint notice issued earlier on Friday by the Ministry of Finance, the People’s Bank of China, and the National Financial Regulatory Administration, which called for further optimizing fiscal-financial coordination to spur domestic consumption. Within hours, major state-owned lenders and China Merchants Bank’s credit card unit published detailed implementation guidelines, outlining eligibility expansions and customer convenience measures.
Higher Caps, Broader Coverage
The most significant change is the increase in the cumulative subsidy ceiling for personal consumption loans and credit card installment products. Agricultural Bank and Bank of China confirmed that eligible borrowers now qualify for up to 5,000 yuan in annual interest subsidies, effective immediately.
Credit card installment products have emerged as a key focus of the policy broadening. Agricultural Bank said its subsidy coverage now extends beyond bill installments to include specialized installments, consumer installments, and cash advance installments — all newly opened during the policy period and subject to spending verification.
The bank specified that the annual subsidy rate for credit card installments stands at one percentage point, capped at 50% of the contracted annualized interest rate for the respective installment product. The interagency notice had stipulated a one-percentage-point subsidy rate for newly originated credit card installment businesses incorporated into the consumer loan subsidy framework.
Streamlined Processes for Existing Customers
Both lenders have introduced measures to ease the burden on existing borrowers. Bank of China said customers who had already completed subsidy applications need not sign new agreements — their accounts will be automatically adjusted to reflect the higher subsidy cap.
Agricultural Bank, by contrast, requires customers to sign a supplemental agreement for each credit card, after which subsidies will be deducted directly from installment interest charges upon bill generation. For installment transactions initiated between August 1 and the policy announcement date, customers may contact the bank to claim retroactive subsidies.
China Merchants Bank confirmed that eligible consumer loan and credit card installment customers will automatically receive the updated subsidy terms retroactive to August 1, without the need for re-signing.
The rapid rollout underscores intensifying competition among banks for consumer finance business, as policymakers lean on fiscal tools to unlock household spending amid a sluggish economic recovery.