The galloping expansion of China's bank loans showed signs of being reined in during September, with 120 billion yuan (15 billion U.S. dollar) less credit issued year on year, indicating the government's macro control efforts are taking effect, the central bank released October 13.

The outstanding loans granted by China's banks reached 22.1 trillion yuan by the end of last month, a 15.23 percent increase year on year, but 0.9 percentage points lower than a month earlier, according to the latest report from the central bank.

The Money supply or M2 increased 16.83 percent to 33.19 trillion yuan, but the increase was also 1.11 percentage points lower than in August.

The M2, which is a measure of demand of the whole of society and an inflation indicator, posted a growth rate that was 1.09 percentage points lower than a year earlier.

It temporarily removed concerns from the market that another interest rate hike may be needed if credit continued to surge in September despite the tightening efforts.

Galloping lending, along with tightening land supply, has long been blamed for China's sizzling fixed assets investment, which is likely to overheat the economy.

The government has brought down a number of measures including rising interest rates, lifting the central bank's capital requirement of reserve ratios, to curb the lending from rocketing.

New bank loans in the first nine months this year totaled 2.76 trillion yuan, overshooting the 2.5 trillion yuan target for the whole year set by the central bank at the beginning of the year.

Zhang Lisheng, a senior official with the central bank, warned earlier this week of a possible rebound in lending.

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