BEIJING, July 8 China's central bank has
reinforced the country's controls on interbank lending by
instructing the headquarters of banks to keep close tabs on this
area, according to two sources with knowledge of the matter.
Interbank loans, which are a part of China's fast-growing
and sometimes wayward shadow banking market, have come under
increased scrutiny on fears that some may sour as the maturing
Chinese economy cools.
Under the latest rules, a bank that wants to open an account
at another bank to conduct interbank lending or borrowing must
get the green light from its headquarters, the sources cited the
central bank as saying in a notice.
The sources declined to be named as they are not authorised
to speak to the media. The notice, which was seen by Reuters,
was published on June 25.
All interbank accounts must be divided into settlement or
investment and financing accounts, depending on their use, the
Only the headquarters of banks or their bigger provincial
branch offices can open interbank accounts for investment or
financing. If any smaller branch outlet needs to start such an
account, it must have its headquarter's approval.
The central bank did not comment when reached for this
Ratings agency Standard & Poor's estimated in April that
about a third of China's shadow banking sector, which it said
has about $30 trillion of assets at the end of 2013, is risky
and may pose some problems.
The last time China tried to rein in the interbank market
was in May, when it announced more expansive rules for the
sector such as capping the size and maturity of loans. The hope
is that this would defuse the risks and better align the
industry with the needs of the real economy.
(Reporting by China Economics; Writing by Koh Gui Qing; Editing
by Jeremy Laurence)