Citigroup has blacklisted several Asian currencies from being used as payment for Australian real estate due to fraud and money laundering concerns.
Mortgage brokers received a list of 12 currencies that the bank will accept. Even income earned in foreign currency other than the loan applicant's nationality will not be permitted for use in the assessment of their ability to pay. This excludes Australian citizens and permanent residents.
"We have excluded certain currencies to ensure we don't attract any increases in unwanted loan application," said a bank spokesman. The number of loan applications in Citi increased after competing Australian banks issued a crackdown on overseas borrowing. "Given increasing difficulty in confirming income from certain countries and to maintain a balanced portfolio without further erosion to our service proposition, we will only rely on (specified) currencies."
The only currencies that the bank will now accept from overseas borrowers are the Canadian dollar, Danish kroner, European Union euro, Hong Kong dollar, Japanese yen, New Zealand dollar, Swedish kroner, Singaporean dollar, South Korean won, Swiss franc, UK sterling, and US dollar. Major Asian currencies like the Chinese yuan, Thai baht, Indian rupee, Indonesian rupiah, Malaysian ringgit, and Taiwan dollar are all excluded.
Citi's move follows the tighter lending terms and conditions first issued by Australia's major banks, like ANZ and Westbank. Aside from these lenders, other banks have also cracked down on lending to foreigners. Bendigo and Adelaide Bank has told more than 30 mortgage managers and thousands of brokers to immediately stop lending to foreign borrowers and exclude foreign-sourced income from local real estate deals.
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