No credit from some banks as quotas reached

Some of China's major banks have stopped lending as they have already reached their January lending quotas, the China Securities Journal reported Friday citing banking sources.

"Branches of a state-owned commercial bank were notified by their head office to stop making new loans from Friday, as the bank's lending quota for the month has run out," the report said, citing a source at a state-owned commercial bank.

Several other banks have also stopped extending credit for the month, the report said.

Last week, citing China's banking regulator, the newspaper reported that overall lending in January should not exceed 12 percent of the 2011 full-year target, which was 7.2 to 7.5 trillion yuan (1.14 trillion U.S. dollars).

Most banks had overshot the January quota, with new loans having exceeded 1.2 trillion yuan as of Jan. 24, the China Business News reported last week.

China's new yuan-denominated loans in 2010 totaled 7.95 trillion yuan, higher than the government target of 7.5 trillion yuan.

Zhou Xiaochuan, the central bank governor, said in an exclusive interview with Xinhua Thursday the central bank will continue to rely on banks' reserve requirement ratio (RRR) and insurance of central bank bills to soak up liquidity, even though the RRR is already at a high level.

Source: Xinhua