Chinese banks granted 740 billion yuan (US$108 billion) in loans in December, the biggest monthly number after last January's 803.6 billion yuan, the Shanghai Securities News reported on Monday.

This was a result of the country's "moderately easy monetary policy" and central government's incentives to encourage lenders to increase credit supplies to boost economic growth, the paper said.

Outstanding loans topped 30 trillion yuan at the end of December, up 19 percent year-on-year, according to the report.

China Banking Regulatory Commission (CBRC) said in a statement on its Web site on Saturday that small and mid-sized commercial banks would be given more room in lending. This comes as one of ten directives given to strengthen credit services and support the economy.

The loan-deposit ratio of small and mid-sized lenders can exceed the required level "by a proper margin", said CBRC.

The current allowed loan-deposit ratio for commercial banks is 75 percent, Shanghai-based Oriental Morning Post reported on Monday.

Financial institutions nationwide extended more than 4.9 trillion yuan of loans last year, an increase of about 1.3 trillion yuan compared with 2007, the newspaper reported.

(Xinhua News Agency January 12, 2009)