BEIJING, April 15 (Xinhuanet) -- China's top banking regulator has started reviewing banks in seven provinces to make sure loans to key industries, including steel and aluminum, were being properly assessed.

The move comes as China attempts to slow a rapidly growing economy fueled by runaway credit growth and amid worries of overinvestment in some sectors, including those targeted in the latest investigation.

The China Banking Regulatory Commission (CBRC) said in a statement on its Web site that it has begun to send teams to the provinces of Guangdong, Zhejiang, Henan, Hebei, Hubei, Jiangxi and Jiangsu to conduct checks at local development banks, State-owned commercial banks, stock-holding commercial banks and rural credit cooperatives.

The focus of the probe will be on loans to the steel, aluminum, cement, property and auto industries, the CBRC said.

The regulator's purpose is to strengthen and improve internal management controls at the lenders and contain their bad loan situation, the CBRC said.

The regulator also would strive to increase loans that encourage consumption and lift employment at agricultural and small and medium-sized enterprises, it said.

The review is expected to be completed in mid-May, it said.

Strong credit growth is a key factor in China's rapidly growing economy, but has spawned worries the nation's banks, burdened by a mountain of bad loans, are not practicing adequate risk assessment as they try to outpace rivals in the fiercely competitive domestic banking industry.

On Tuesday, People's Bank of China Governor Zhou Xiaochuan said in a speech published in the Financial News that M2, China's broadest measure of money supply, was up 19.2 percent year on year at the end of March, higher than expectations and exceeding the official 17 percent growth target set for this year.

Total outstanding loans rose 20.66 percent year on year at the end of March, Zhou said. The rate of loan growth is faster than the government's target of 16 percent for this year.

(Shenzhen Daily/Agencies)