Chinese banks: Not told to stop lending

Loans and bills will continue for the rest of the month. Chinese banks are denying reports published Wednesday in the China Securities Journal citing sources from various banks sayind they had be told to put a temporary halt on fresh lending.

Top lenders ICBC and the Bank of China say instructions are for prudence and balance in lending, not a complete standstill. The watchdog has confirmed this, saying its pace not volume that needs careful management.

Top executives at China's two big state banks, Bank of China and the Industrial and Commercial Bank of China, or ICBC, have told CCTV they were never told to stop lending for the rest of the month.

Xiao Gang, chairman of Bank of China, said, "It's not true that we were told to stop lending. But we were instructed to adjust our lending structure, meaning we need to differentiate our lenders with different priority levels."

Li Xiaopeng, deputy president of ICBC,said, "Our operations are carrying on as normal. No notice to cease lending was sent to us. Recently we have been implementing our plan in issuing loans steadily, orderly and balanced, according to the regulator's request. "

Liu Mingkang, chairman of the China Banking Regulatory Commission also denied the report when he attended a financial forum in Hong Kong. He said the commission has been controlling the pace of banks' new lending but never required banks to cease lending for the remaining days of January.

Commercial banks say a burst of credit in the first couple of weeks was not unusual as good quality loans are always secured quickly. The rest of the year will see a stable monetary supply.

Xiao Gang, chairman of Bank of China, said, "I don't think lending will be reduced significantly. The relatively loose monetary policy will continue."

Li Xiaopeng said, "Our guidelines are that the pace and volume of the new loans will be generally the same as last year. But this year we will focus on structural adjustment. We'll support capable firms going abroad, so the economy can grow sustainably."

Chinese banks lent a record 9.6 trillion yuan in 2009, up 4.7 trillion yuan on the previous year. The banking regulator has set 2010's annual target at 7.5 trillion yuan.