Four biggest banks lend only 300 billion in February

10:12, March 03, 2010      

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Lending by China's four largest state-owned banks withered to less than 300 billion yuan in February, amid Chinese central regulators' strengthening macro-control measures to rein in credit and prevent inflation.

Chinese newspapers reported that Wednesday that the four lenders, the Industrial and Commercial Bank of China, the Bank of China, the China Construction Bank and the China Agriculture Bank, approved a total of 294 billion yuan of loans in February, dipping more than 34 percent from January.

China's financial organizations approved 1.39 trillion yuan of loans in January, triggering the People's Bank of China, the central bank, to raise the reserve requirement ratio by 50 basic points in February, to curb asset bubbles and price rises. Another regulator, China's banking regulatory commission under the State Council, also meted out an array of measures to control lending and prevent bad loans from forming.

Experts estimate the amount of loans approved by banks in February at less than 600 billion yuan. The regulators are reportedly planning 2010 total lending at 7.5 trillion yuan, as compared with last year's 9.6 trillion yuan.

On Wednesday, Chinese stock markets in Shanghai and Shenzhen traded lower, as investors are unnerved by the news, which is diluting liquidity.

Peope's Daily Online
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