Bad loan ratio in China's commercial banks has reduced to 6.1 percent as of June 30 amid the sector's efforts to enhance risk control, the country's banking regulator said on Sunday.

The figure was 0.62 percentage points lower compared with that at the beginning of 2008, according to China Banking Regulatory Commission (CBRC).

Major commercial banks had a combined bad loans of 1.18 trillion yuan (172.48 billion U.S. dollars) by the end of June, 24.71 billion yuan less than the beginning of this year.

Banks should further increase risk prevention and boost capital adequacy in the second half, said CBRC chairman Liu Mingkang.

Liu also urged financial institutions to extend financial services to small-sized enterprises and rural industry to help them go through the hard times after frequent natural disasters.

The country's financial institutions extended a total of 2.7 trillion yuan loans in the first half of the year, up 15.2 percent from a year earlier.

(Xinhua News Agency July 21, 2008)