CENTRAL bank Governor Yi Gang on Monday urged banks to use its reference rate, the loan prime rate (LPR), as soon as possible in making loans in a bid to cut down real interest rates, the central bank said.

In a meeting with officials of 24 financial institutions, Yi asked them to remove an implicit floor in lending rates and lower real loan interest rates, the bank said in a statement.

The central bank earlier this month unveiled a plan to reform the country’s LPR mechanism.

Introduced in 2013 and disclosed every trading day, the LPR functions as a market-based reference for lenders to set their loan interest rates.

Starting from Aug. 20, the National Interbank Funding Center now discloses the new LPR at 9:30 a.m. on the 20th day of each month.

The central bank governor also urged the financial institutions to ramp up support to the real economy and provide more financial resources to support small and micro businesses, private firms, and the manufacturing and service sectors.

Earlier, the central bank’s Shanghai branch told another meeting of banking institutions that have licenses to issue Chinese currency loans that they had to use the LPR in setting the terms of at least 30 percent of new loans by the end of September, and 80 percent by the end of March 2020, two banking sources said.

The Shanghai meeting, which was attended by about 170 banking institutions, was aimed at urging banks to implement the LPR, one source said.

(SD-Xinhua)