The People's Bank of China (PBOC), China's central bank, issued a circular Monday requiring banks to curb lending to energy-intensive industries, a move echoing government energy-saving and pollution-reduction measures.

Banks must strictly review loan applications from companies in energy-consuming industries, the circular said, adding that only bank headquarters can extend loans to finance capacity expansion projects in energy-guzzling sectors.

It also banned new credit to any projects not complying with government energy-saving policies.

According to the circular, banks should conduct an overall review of loans to energy-intensive industries and report the results to the central bank by the end of June.

The State Council, China's Cabinet, urged in early May all government departments make efforts to cut emissions and conserve energy to meet the country's target set in the 11th Five-Year Plan (2006-2010), according to which China will cut its per unit GDP energy consumption by 20 percent compared with 2005 levels by the end of 2010.

(Xinhua News Agency June 1, 2010)