Mainland banks extended more than one trillion yuan (HK$1.14 trillion) in loans in the first 20 days of this month, an astonishingly high figure that has sent regulators scrambling to tighten their grip on credit and prompted the country's two largest banks to temporarily halt new lending.
Industrial and Commercial Bank of China and Bank of China, among others, have temporarily stopped extending new credit lines under the directives of the regulator, according to banking officials with direct knowledge of the matter. The temporary suspension will probably last until the end of the month.
The China Banking Regulatory Commission is determined to rein in easy credit because officials are worried about asset bubbles and soaring inflation.
A banking analyst who obtained the official loan data said the Big Four lenders granted about 550 billion yuan of loans as of January 20, adding that total lending nationwide has exceeded one trillion yuan. The three-week loan growth is at a pace well above the 7.5 trillion loan target for this year.
The CBRC has intensified window guidance - a method the authorities use to instruct company executives to operate in line with government directions - requiring commercial banks to control the pace of lending.
A press officer with the regulator said yesterday the window guidance did work in curbing loans.
