China's banking regulator on Thursday announced it will allow banks to extend mortgage loans that use share funds as collateral amid a plunging stock market.
Banks will be able to discuss redefining mortgage terms of share-secured loans that are due or adjusting collateral with their clients, said an announcement of the China Banking Regulatory Commission (CBRC).
The announcement is the latest effort from central authorities to maintain liquidity and draw more capital in the stock market at it continues volatility. Agencies including the central bank and stock regulator have vowed measures to stabilize the market.
Chinese shares have been in a downward spiral since hitting a peak in June. The benchmark Shanghai Composite Index has shed more than 30 percent.
In addition, the CBRC encouraged banks to offer financing aids to China Securities Finance Corporation Limited, a national margin trading service provider, and make loans to listed companies that planned to purchase their own stocks.
It said financial institutions may discuss with their clients adjusting the risk warning line and the forced liquidation level of their securities investment.