Banks vow funds to build green economy

A group of 29 banks, including China's big-five lenders, signed an agreement at an industry conference in Fuzhou yesterday to commit themselves to offering green finance to develop a greener economy in the country.

The top-five banks — the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, the Bank of China, and Bank of Communications — were among the lenders which have vowed to manage their lending to industries with excess capacity, strengthen green finance, and improve the environment and social performance.

Resolving the issue of excess capacity at some industries is an important task for economic and financial planners in the country, Shang Fulin, chairman of the China Banking Regulatory Commission, said at the conference in the capital of Fujian Province. He suggested adopting the approach that strictly controls credit expansion and optimizes the existing credit scale.

Shang also warned the commercial banks about possible rising bad loans in the short run and reiterated that resolving the matter is an important opportunity and challenge for them to restructure and develop.

Shanghai Pudong Development Bank said in a statement earlier that it has extended more than 300 billion yuan (US$49 billion) of green credit to clean and renewable energy, environmental control, and carbon emissions trading enterpri-ses over the past five years.