Chinese central bank asks major lenders to curb credit growth this year
China’s central bank has asked the country’s major lenders to curb loan growth for the remainder of the year after a surge in the first two months stoked bubble risks, people familiar with the matter said. In a meeting with the People’s Bank of China on March 22, banks were urged to keep new advances in 2021 at about the same level as last year, people said, asking not to be identified. because the matter is private. Some foreign banks have also been urged to limit additional lending through so-called over-the-counter windows recently after increasing their balance sheets in 2020, one of the people said. The comments go into more detail on what the central bank said publicly after the meeting, when it said it asked representatives of 24 major banks to keep lending growth stable and reasonable.
In 2020, banks distributed a record credit of 19.6 trillion yuan ($ 3 trillion), of which about a fifth was spent on inclusive financing such as loans to small businesses. Lending the same amount this year would bring the outstanding balance to about 192 trillion yuan, an annual increase of about 11 percent, the slowest pace in more than 15 years.