Big Banks' July Lending Down Sharply

By staff reporters Fang Huilei and Wenxiu 

China's big state-owned commercial banks extended around 168 billion yuan worth of new loans in July, down sharply from the 497 billion issued in June, banking sources told on August 4. 

The sharp decline in lending signals the effectiveness of the central bank's "fine tuning." While officially maintaining a "moderately loose" monetary policy, the People's Bank of China and other regulators have been informally warning commercial banks to maintain the integrity of the credit evaluation process and have penalized aggressive lenders by requiring them to purchase billions of yuan worth of bills.