Around the time of the eleventh, the stock market was on a hot upward trajectory, tempting many investors to consider the crooked idea of "borrowing to enter the market." However, recently there have been online reports that a certain joint-stock bank has issued a notice to investors who borrowed to enter the market, demanding the early repayment of credit funds and requiring the relevant borrowers to repay all funds within a month.

As of the time the journalist wrote the article, the bank had not responded to this matter. A credit customer manager from the bank told the reporter from Shell Finance that the post-loan inspection for credit funds entering the market has indeed been very strict recently.

This is in response to the previous regulatory guidance against "strictly prohibiting bank credit funds from entering the market." Recently, financial regulatory authorities have provided window guidance to commercial banks, requiring financial institutions to pay great attention to investor suitability management and investor protection, strengthen internal control and compliance management, and strictly control leverage. Since October, many banks have reiterated the strict prohibition of credit funds flowing into the real estate market, stock market, and other fields, and emphasized that if the violation of misappropriation is found, the bank will recover the loan in advance.

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Borrowers entering the market are required to repay in advance, and consumer credit loans have become the "hot spot" for entering the market.

Recently, an investor from Shanghai posted a screenshot of the bank's credit funds being recovered in advance by the bank. According to the screenshot, this investor borrowed 200,000 yuan in consumer loans from the bank, but was ordered by the bank to repay all funds within a month because his credit funds were "suspected of entering the market for trading."

"Recently, the bank has indeed increased the post-loan management of credit funds. If there is a problem after the loan, the funds will be recovered." A credit manager from the bank told the reporter from Shell Finance that consumer credit loans are the "hot spot" for credit funds entering the market, mainly because these funds are approved quickly, and the funds are directly transferred into the borrower's card.

The credit manager said that these consumer credit loan customers submit applications online. If they can conceal their real purpose, it is not easy for the bank to detect before the loan. However, the bank will remind before the loan that credit funds cannot enter certain fields, such as not flowing into the stock market and real estate market. Therefore, the bank can only strengthen post-loan management to avoid the problem of funds entering the stock market.

According to the reporter from Shell Finance, after the stock market exploded at the end of September, bank consumer loans also increased. An insider from a bank in the East China region told the reporter from Shell Finance that the amount of bank consumer loan credit loans has increased.

"In the current hot capital market environment, financial institutions will indeed pay more attention to internal control and compliance management." The aforementioned insider from the East China region said, for example, by increasing the intensity of telephone callbacks and post-loan use voucher verification to monitor the flow of funds.

There are many dangers in entering the market with loans, and the strict prohibition of credit funds entering the market is not an empty talk.Banks place such emphasis on the issue of credit funds entering the stock market because the harm is significant. For investors, using loans to enter the market means leveraging, which also amplifies stock market fluctuations and increases investment risks. At the same time, investors who use loans to enter the market also face the risk of banks directly reclaiming funds, adding to the uncertainty of their investments.

In this bull market, there have already been cases of investors who have used loans to enter the market and suffered losses. A Guangdong investor with the online nickname "Xiao Lu" told a reporter from Beike Finance that his recent experience of using loans to trade stocks resulted in a substantial loss.

After seeing the news of a thousand stocks hitting their upper limit on September 30th, "Xiao Lu" decisively took out a loan of 100,000 yuan to trade stocks. However, he chose to buy China Aluminum on October 8th, but by the time he entered, it was already at a high point, and he lost 10,000 yuan that day. Although there has been some recovery in the past two days, the overall situation is still a loss. At the same time, he needs to repay more than 8,000 yuan in loans every month.

"The more the stock market is booming, the more investors need to remain calm and rational," said Liao Zhiming, the chief analyst of the banking industry at China Merchants Securities. Investors need to choose investment varieties based on their own risk tolerance. The risk level of the stock market is completely different from that of investment deposits and bank wealth management. Due to the violent fluctuations in the stock market, it is not recommended that all investors blindly follow the trend into the stock market.

In addition, Dong Ximiao, the chief researcher at China United, said that credit funds not used for the purposes stipulated in the contract and diverted to the stock market and real estate market is a violation and even an illegal act. For financial institutions, the difficulty of post-loan management increases after funds are diverted, and credit risks may increase.

"For the stock market and real estate market, the rapid entry and exit of non-compliant funds may increase market fluctuations and are not conducive to the sustainable and healthy development of the market," Dong Ximiao said. If credit funds used to support key areas and weak links are diverted, it will also affect the effectiveness of monetary credit policy and is not conducive to economic recovery and rebound.

The flow of credit funds into the stock market has been repeatedly banned, and experts suggest that a blacklist system can be established in a timely manner.

The flow of credit funds into the stock market is not a new thing and has occurred in the past when stock market sentiment is high. Although banks have increased post-loan management efforts and supervision has increased supervision of banks, this issue has been repeatedly banned.

"Preventing personal consumer loans from illegally flowing into the stock market is a compliance challenge faced by banks and consumer finance companies alike," said an insider from a bank in the East China region. If borrowers can evade supervision through some means, it increases the difficulty of banks' post-loan management.

The bank insider said that the current bank's measures to prevent credit funds from entering the market are mainly to include the requirements to strictly prohibit personal consumer loans from illegally flowing into the stock market in the loan contract. At the same time, strengthen compliance publicity, especially compliance prompts during the payment stage. Banks will also use big data and artificial intelligence technology to improve the timeliness and accuracy of risk identification.Regarding the issue of credit funds flowing into the stock market, Dong Ximiao believes that while recovering some non-compliant funds, financial institutions can further take a variety of measures to strengthen the management of the use and flow of credit funds.

"Banks can enhance the prevention and control of the misappropriation of loan funds. If borrowers fail to use the loan for the agreed purpose, such as using personal consumer loans or business loans for investing in stocks and real estate, relevant departments should jointly pursue corresponding legal responsibilities," Dong Ximiao suggests. For financial institutions, monitoring the flow and use of credit funds is a "difficult and persistent" problem. Therefore, it is necessary to strengthen the construction of the social credit system, include the behavior of fabricating loan purposes and misappropriating credit funds in the credit reporting system, increase the cost of borrowers' violations, and curb the non-compliant inflow of personal consumer credit funds into the real estate market and stock market from the source.

In addition, Dong Ximiao also suggests that financial institutions can establish gray and blacklist systems in a timely manner. At the same time, financial regulatory authorities should take the lead in establishing a monitoring platform for the use and flow of funds across the entire banking industry, guide the legal and compliant use of credit funds, and better promote the important role of finance in serving the real economy.