Several state-run Chinese banks have ordered some branches to suspend new lending for the rest of this month, suggesting a coordinated effort by Beijing to manage state banks’ torrid lending in the year’s first few weeks.
A person with direct knowledge of the matter said Industrial & Commercial Bank of China Ltd., the country’s biggest lender by assets, has ordered its branches in Beijing not to issue any new loans for the time being.
China Citic Bank also suspended new lending in Shanghai last week because its local operations have already used up their monthly quota for new loans in the city. The Citic Bank official added that both the bank’s own headquarters and the People’s Bank of China, the country’s central bank, "have told us to control the pace of lending this year."
The moves by the two state-owned banks follow similar steps taken last week by state-run Bank of China.
Wall Street Journal Online
reports Beijing has also raised the amount of reserves banks have to hold at the central bank against their deposits, which shrinks the amount they can lend. It is gradually lifting the yield on central bank bills, making it appealing for banks to buy government debt rather than lend.