File photo of one of the involved real east agency Homelink. [Photo: agencies]

Commercial banks in Shanghai are required to cut off cooperation with six real estate agencies including HomeLink Real Estate for one month, according to a post on the Weibo account of the information office of Shanghai government.

The ban was ordered by Shanghai's banking watchdog on Saturday night as the authority found some personal housing mortgage loans between banks and real estate agencies had violated regulations.

The ban will take effect on April 25.

The authority said that some commercial banks in Shanghai illegally transferred money from personal mortgage loans to a third party who was not involved in the property purchase and the third party then transferred the money to a real estate agency. While some of the agencies also helped the home buyers acquire down-payments through illegal channels.

The authority has also forbidden seven banks in Shanghai from giving individual housing loans for two months, as they provided individual loans to home buyers that were against regulations.

Online News portal, thepaper.com, cited a manager of China's Cultural Bank as saying the suspension will have an enormous impact on the agencies because almost all of their businesses related to home mortgage loans for pre-owned homes are cooperated with the agencies.

A manager of a home agency, Homelink, said in thepaper.cn that they may need to adopt alternative measures to deal with the situation. Another manager said their business may be stalled due to the suspension.