Financial Regulatory Forum

China asks banks to curb month-end lending -bankers

August 28, 2009

china-regulator    SHANGHAI, Aug 28 (Reuters) – China’s banking regulator has given Chinese banks verbal instructions that they must not rush into end-of-the-month lending as the close of August draws near, bankers at several Chinese banks told Reuters on Friday.
   The China Securities Regulatory Commission used traditional government “window guidance”, in which authorities tell Chinese institutions how they should act in line with government policies, to guide the banks to avoid lending excessively, the bankers said.
   Banking sources told Reuters that Chinese banks had only lent around 200 billion yuan ($29 billion) so far this month, with the biggest four state-owned banks lending around 100 billion yuan.
   If lending in August remains at that level, it will lag far behind 360 billion yuan in July and a monthly average of more than 1 trillion yuan in the first six months of this year.
   “Most banks have been very cautious in lending so far this month, and they had hoped to lend more late in the month to compensate,” said a banker at a major state-owned bank.
   “But the regulator’s window guidance dashes hopes for an end-of-month rush.” (Reporting by Victoria Bi and Edmund Klamann; Writing by Lu Jianxin)
 ((jianxin.lu@thomsonreuters.com; +86 21 6104 1792; Reuters Messaging: jianxin.lu.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: CHINA BANKS/LENDING 
  
Friday, 28 August 2009 06:27:43RTRS [nSHA304109] {C}ENDS

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