Chinese banking regulators have ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein real estate speculation.
All financial institutions must follow centralised rules for curbing property loans and ensuring risks are strictly controlled, Liu Mingkang, head of the China Banking Regulatory Commission, said in a statement late Tuesday.
China has tried to clamp down on ballooning lending, which hit a record 9.6 trillion yuan last year, as it fears a growth of soured loans that could hit banks.
Liu said this month banks had been ordered to reassess all loans to local government companies on a "project-by-project" basis
And policymakers have raised bank reserve ratios twice since the start of the year -- effectively limiting the amount of money they can lend.
Beijing has also recently announced a range of new measures to prevent the growth of asset bubbles and soaring property prices.
Data showed property prices in 70 cities jumped 11.7 percent in March, the fastest year-on-year rise for a single month in five years.
Over the past week, the government has tightened restrictions on advance sales of new property developments, introduced new curbs on loans for third home purchases, and raised minimum down payments for second homes.
China's economy still faces serious challenges this year even though the economy showed steady recovery in the first quarter, Liu said in the statement.
Lenders must effectively control their full year new loan growth, adjust the pace of lending and optimize their credit procedures, Liu added.
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