The People's Bank of China has issued central bank notes worth nearly 100 billion yuan to commercial banks, China Securities Journal reported Friday.
The central bank notes target mostly commercial banks which extended huge amount of credit in the first half year, said industry players. The notes are like kind of "fines" (for the banks' huge lending) and signal a slight change in the loose monetary policy, they said.
Apart from many shareholding commercial banks, state-owned Bank of China will also receive 45 billion yuan in central bank notes, a source close to the bank said.
Central bank notes, as one of the instruments for open-market operations, can help slow commercial banks' lending as recent months have seen explosive growth in new loans.
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(China.org.cn July 24, 2009)