Bank of China has been given a quota of 3.1 billion yuan ($497.76 million) in a pilot program of the nation's credit asset-backed securitization. It amounts to a total value of 50 billion yuan, according to an announcement made by the bank on Tuesday.

BOC is the third bank that has been approved for the issue of credit asset-backed securities since the pilot program was introduced earlier this year.

In September, China Development Bank issued a product for credit asset securitization to a total value of 10.17 billion yuan in the interbank market. The Bank of Communications issued a product for asset-backed securities to a total value of 3 billion yuan at the beginning of November.

Analysts said the issue of asset-backed securities will help to relieve the pressure on commercial banks brought about by capital adequacy ratios, improve credit structures and reduce potential risks.

A source quoted by Shanghai Securities News said the pilot program of credit asset-backed securitization with a total quota of 50 billion yuan will give first priority to policy banks then State-owned commercial banks.

The source also said the pilot program will not have a great impact on the pressure for liquidity felt by commercial banks because the total value of 50 billion yuan is not significant given the fact that financial institutions in China had seen a total balance of credit of 66 trillion yuan by the end of October.

wuyiyao@chinadaily.com.cn