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China's bank loan growth likely to slow in second half of 2009
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15:25, July 24, 2009

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According to the Shanghai Securities News, several banks have already adjusted the pace of lending or even temporarily suspended it. In July, lending is likely to drop even further over the previous month. In addition, the central bank has recently issued earmarked bills to several banks.

Meanwhile, senior managers from several banks stated that future lending will focus on small and medium-sized enterprises, farmers, rural areas, agriculture and other government-supported sectors.

Some insiders believe that the banks' move to tighten lending at the end of the month is perhaps related to a requirement issued by the China Banking Regulatory Commission (CBRC) in early June, asking banks to not intensively extend loans at the end of each month to reach lending targets. During the last three days of March, the average amount of new loans issued per day stood at 200 billion yuan. However, in the first 10 days of April, the figure dropped by over 100 billion yuan. This is not favorable to continuous and stable lending.

CBRC Chairman Liu Mingkang recently stressed at the third briefing on the economic and financial sector situation that potential risks amid fast credit expansion are increasing, and imprudent practices, impulsive lending and extensive operation of financial and banking institutions have been on the rise.

He added that currently, it is essential to prevent emerging risks such as false or inadequate project capital, bill financing, loan concentration and shaky real estate markets.

By People's Daily Online

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