China's bank regulator watchful of bad loans

China's top banking regulator on Friday vowed to take active steps to control bad loans while guarding against and defusing financial risks.

At a meeting to address current economic and financial conditions and set key tasks for future work, the China Banking Regulatory Commission (CBRC) asked the country's banking sector to be vigilant against bad loans, according to a statement on the commission's website.

Banks and other financial institutions should actively control the rises in bad loans and effectively handle existing bad loans, including restructuring debts and revitalizing bad assets through market mechanisms, the regulator said.

The CBRC also emphasized "firmly holding the bottom line of no systemic and regional risks," vowing to facilitate the implementation of the latest round of property controls and support the construction of affordable housing.

The CBRC also vowed to regulate the development of financial products and take strict precautions against contagion risks in social financing and illegal fund-raising.

By the end of March, outstanding loans to small and micro businesses by Chinese banks and financial institutions rose 21.1 percent year on year to 15.5 trillion yuan (2.5 trillion U.S. dollars), while outstanding loans to affordable housing projects stood at 700.6 billion yuan, up 34.6 percent from a year ago, according to CBRC data.