CBRC to lend on real needs of economy

The China Banking Regulatory Commission will adjust lending scale according to the changes in the economic situation, a senior executive of the regulator said yesterday.

Speaking at a forum in Tianjin yesterday, Cai Esheng, vice chairman of the CBRC, said: "Credit supply naturally serves the purpose of supporting economic growth. Lending growth should be advanced steadily. The adjustment of lending scale and the pace of adjustment depend on the needs of the real economy."

Premier Wen Jiabao said last week that maintaining economic growth will be the government's priority. China recently accelerated approval for several infrastructure projects and encouraged private investors to enter state-dominated industries such as railway construction and health care.

"The CBRC will align its policy with the government's fine-tuning measures and the central bank's monetary policy," Cai said. "Its major responsibility is to monitor lenders' operational behavior and risks."

According to data released by the People' Bank of China, combined new loans fell sharply by 32 percent to 682 billion yuan (US$107.5 billion) in April from March, fueling talk the central bank may cut reserve requirement ratios for commercial banks and lower interest rates.

In a latest report, China International Capital Corp said credit demand was weak in May and the central bank may cut interest rates this month.