The People's Bank of China will offer credit of 5.5 billion yuan (US$785.7 million) to support the earthquake-stricken area.

The central bank decided to offered 3.3 billion yuan of credit to Sichuan Province and 2.2 billion yuan of credit to neighboring Gansu Province. The funds will be used to meet the liquidity demand from commercial banks and rural cooperatives in the area.

The central bank payment settlement system is operating and the cash flow is smooth, said Su Ning, deputy governor of the central bank, in a statement on its Website on Tuesday night.

The central bank has already held two emergency meetings to ensure all its branches and related entities offer full support to the quake-hit area.

The national treasury has allocated capital of 1.36 billion yuan to the disaster-hit area while its branches in Sichuan and Shaanxi provinces opened a "green path" to smooth capital flow worth 841 million yuan until 5pm yesterday.

China's banking industry will do all its best to give financial support to the quake-hit area.

Lenders including the country's big five, joint stock banks and city commercial banks donated millions of yuan to the area.

Banks have also opened 24-hour donation channels on their e-banking network for clients to donate money to help.

Meanwhile, the China Banking Regulatory Commission ruled yesterday that banks can't charge remittance fees on donations to designated accounts.

Before the ruling, lenders including Bank of China, Bank of Communications, Bank of Ningbo, Industrial & Commercial Bank of China and China Merchants Bank had already waived remittance fees.

(Shanghai Daily May 15, 2008)