The Chinese government is injecting RMB 320 billion ($47 billion) in public funds into small and midsized banks in a bid to help regional lenders reeling from the economic slowdown, reports Nikkei Asia.
The capital injections are financed by funds raised with infrastructure bonds. The China Banking and Insurance Regulatory Commission, along with the Ministry of Finance, plan to grant RMB 320 billion in bond issue allotments to specific regions through the end of August.
As of June, RMB 103 billion in bond allotments had already been granted to Liaoning, Gansu and Henan provinces, as well as to the city of Dalian. Smaller banks operating in the applicable regions will received the funds in the form of capital injections. This spring, Liaoning poured RMB 13.5 billion into five banks, including Bank of Dandong and Bank of Yingkou.