(Yicai Global) Feb. 24 -- China's commercial banks should be supported with adequate funds so they can lend to micro, small and medium-sized companies during the novel coronavirus outbreak, according to an official at the central bank.

Besides enhanced targeted cuts to reserve requirement ratios, relending and rediscounting to help farmers and small businesses, the issuance of special bonds for micro firms and SMEs should be stepped up to allow banks to have sufficient preferential sources of funding, Chen Yulu, deputy governor the People's Bank of China, told a press conference today.

The central bank will support the nation's three policy banks -- the Agricultural Development Bank of China, the Export–Import Bank of China and the China Development Bank -- to enhance credit support for SMEs in manufacturing; SMEs and micro firms in foreign trade as well as those involved the spring planting and those the hog production chain.

The country will allow banks not to report overdue loans from industries, SMEs and micro firms struck by the epidemic to regulators, and will consider providing preferential support on loan risk classification.

At the same time, China will guide banks to make full use of fintech, in which the country has first-mover advantages, to comprehensively enhance risk identification and risk management capabilities, and try to ease the increase of non-performing loans as far as possible, Chen said.

The NPL rate at commercial banks averaged just 1.86 percent last year, while the rate among SMEs was well below the regulatory standard of 5 percent though it was slightly above the average level, Chen added.

Provision coverage at China's banks is as high as more than 180 percent, so the country has adequate resources and capacity to deal with the impact of the ongoing outbreak on SMEs and the national economy, he said.

Editor: Peter Thomas