Regulator to bring credit growth under 15% for 2007
Updated: 2007-07-23 09:56
China banking regulator urged to curb the growth of newly-added bank loans this year to no more than 15 percent in a bid to slow down the blistering economic growth.
The bank loans increased by 2.54 trillion yuan (US$335.5 billion) in the first half of this year, a year-on-year rise of 16.9 percent, according to the People's Bank of China, or the central bank.
It is a clear sign that China's economy develops from fast to over-heated. Instability exists in the financial sector. It is harder for banks to manage lending risks, Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), was quoted by the 21st Century Business Herald as saying.
The CBRC said at its interim meeting that it will urge commercial banks to enhance loans payment system to better track how the loans were used and prevent clients from misappropriating loans.
The CBRC announced on June 18 that it has punished eight domestic banks for failing to prevent two corporate clients from misappropriating loans of 4.46 billion yuan (US$589.1 million) to invest in the equity market and real estate projects.
Liu said the CBRC should redouble its efforts to curb rebound in non-performing loan growth and prevent criminal cases in the banking sector.
The number of criminal cases involving more than 1 million yuan each dropped by 76, or 60 percent, in the first six months, he revealed.
He said the industry regulator will promulgate regulations on management of banking consortium loans soon to help banks identify and prevent financial risks.
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