BEIJING - China's central bank on Tuesday denied reports that it had stopped a bank's credit asset securitization (CAS) program, saying it is the banks' decision to issue CAS products.

The statement was made by a spokesperson of the People's Bank of China in response to rumors that a CAS program run by Ping An Bank in the Shanghai Stock Exchange had been called off by the central bank.

Liquidity concerns abate for most Chinese lenders

More lenders make RRR cuts

Credit asset securitization is a process where bank credit assets with poor liquidity and predictable income are sold in the form of securities in the capital market to generate liquidity.

The banks need no administrative approval before issuing CAS products, and they make decisions on their own, including the timing of the issuance, said the spokesperson, who did not give his or her name.

However, they should report to the central bank before the issuance, which is not contradictory to "free issuance," as the CAS involves the "implementation of monetary policy and the coordinated development of financial market," the spokesperson said.

The central bank supports Ping An Bank's CAS program in the Shanghai Stock Exchange, and some registration and trusteeship work should be conducted in accordance with models already decided by the regulators so as to protect the interests of investors, the official said.

The central authorities in August last year decided to expand a pilot program for securitizing credit assets with the precondition that risk would be strictly controlled.

By the end of May this year, a total of 23 financial institutions had issued CAS products worth 179.3 billion yuan ($28.8 billion) in 43 batches, official data showed.