“The value of precious metals held by China’s biggest lenders surged 66 percent from a year ago as banks lease more gold to customers because tighter borrowing rules make it harder to lend funds. The growth since last year outpaced the gain in benchmark bullion prices, which rose 7.5 percent over the same period. China is seeking to rein in credit by raising borrowing costs and cutting off lending to sectors considered at risk of default amid a property slump and rising number of bad loans. That’s prompting banks to hold more precious metals as they expand their gold-leasing business because it’s not subject to loan caps and is considered off-balance sheet lending, according to Industrial Bank Co.”
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