China puts banks under the microscope to tackle debt problem

Beijing targets cozy ties between regional banks and local authorities

0404N_Zhongyuan Bank

Zhongyuan Bank is among those targeted by China's crackdown on bad lending practices.

YUSHO CHO, Nikkei staff writer

SHANGHAI -- China is stepping up oversight of its banks in an effort to curb excessive lending, walking a thin line between tackling one of the nation's biggest economic risks and hitting the brakes on continued growth.

Financial risks are a challenge that China must overcome, President Xi Jinping stressed at Monday's inaugural meeting of the Central Committee for Financial and Economic Affairs.

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