Banks warned to beware of risky loans

By Zhang Fengming | June 2, 2009, Tuesday |

Print Edition

CHINA'S banking regulator warned banks to be on the outlook for risky loans even as they increased their lending to support the government's call to extend more credit to help the economy.

The China Banking Regulatory Commission will closely monitor how banks manage the risks to minimize potential problems while supporting the granting of more credit to boost economic growth, Liu Mingkang, head of the banking regulator, said yesterday on its Website.

Banks in China have already moved to curb irregularities, or cut operational risks, by monitoring the procedures in which credit is granted.

The banking watchdog and the Ministry of Finance require banks to beef up risk control in a joint statement they issued late Sunday.

"Banks and financial institutions must further increase their support to the economy and strengthen risk management to boost a stable and relatively fast economic growth," the two bodies said.

Banks in China extended a record 5.17 trillion yuan (US$757.2 billion) of new yuan loans in the first four months of the year.

Finance

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Banks warned to beware of risky loans

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