The mainland's biggest banks are resisting government pressure to lower borrowing costs amid an economic slowdown as they seek to maintain the profitability of their lending operations, officials at the top four lenders said.
The banks were limiting discounts for their best corporate clients to 10 per cent of the benchmark lending rate, the officials said, asking not to be identified.
The central bank in July began allowing lenders to offer credit at 30 per cent less than the benchmark rates.
Keeping borrowing costs high may blunt efforts to revive growth that has decelerated for six straight quarters in the world's second-largest economy.
Credit expansion was also limited by the central bank's loan quotas, the officials said, highlighting the conflicting efforts within the country to curb bad debts while boosting funding for local governments' infrastructure projects.
"Banks can no longer afford to ramp up lending recklessly, as they've learned a lesson from the past and their operating environment has deteriorated significantly," said Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp.
