China's CBRC told banks to limit lending

By IBTimes Staff Reporter | January 20 2010 5:51 AM

Mr. Liu the chairman of the China Banking Regulatory Commission said today that China will control credit growth to reach 7.5 trillion yuan ($1.1 trillion) this year, while he added that some banks were told to limit lending and he didn't identify those banks.

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Liu ensured that there are a number of regulatory requirements to ensure what he called a prudent supervision, while banks that couldn't meet those requirements were told to limit lending and to raise capital.

However, this came after a record 9.59 trillion yuan of new loans obtained in 2009, pressuring the People's Bank of China to decide last week to force banks to raise deposits starting January 18 by 0.5%, that is the first decision of its kind since June 2008. The bank aims at avoiding an asset bubble formation that may weigh on economic activity in the world's third largest economy. Yet, the reverse ratio for bigger banks is now 16.0%.