Banking regulators in Xiamen, a port city in East China's Fujian province, stepped up checks on consumer loans and personal business loans offered by commercial banks to prevent funds from flowing into the housing sector in violation of regulations.

During the first nine months of 2017, consumer loans and personal business loans increased rapidly in Xiamen. The growth rate was 30 percentage points higher than that of the previous year. The regulators believed part of the funds were used for house purchasing, said Zhang Xintan, director-general of the Xiamen Office of the China Banking Regulatory Commission, at a news conference on Thursday.

"On the one hand, we required banking institutions to track the money flow. On the other hand, we used an examination and analysis system developed by the CBRC to analyze the data of questionable loans and demanded banks to check further," Zhang said.

These combined measures helped banking institutions detect 1,037 loans violating regulations, with a total amount of 110 million yuan ($16.6 million). Relevant banks were instructed by regulators to rectify and accelerate the maturity of the loans, he said.

The CBRC Xiamen Office also demanded banking institutions establish a long-term mechanism for examination and management of the real purpose of loans. For instance, banks should require consumer loan applicants who said they will buy high-end consumer goods or luxury products to provide invoices as proof.

The regulatory efforts proved to be effective on containing short-term speculative purchases of housing.

In October, the sales price indices of newly constructed commercial residential buildings and second-hand residential buildings in Xiamen dropped slightly by 0.2 percent and 0.4 percent month-on-month respectively, according to the National Bureau of Statistics.

During the first 10 months of this year, the total floor space of commercial residential buildings sold in Xiamen declined by 57 percent from the previous year to 1.27 million square meters, according to the Xiamen Municipal Bureau of Land, Resources and Housing Administration.