In order to meet the newly set regulations, the banks in China have initiated a wave of capital raising techniques. They hope to bring in billions of dollars to build an obstacle against their falling down.

The banking regulator of Agricultural Bank of China Ltd. upon knowing the misclassification of some loans to local governments rejected to be a part of China’s biggest lender’s shares. Similarly, the China Construction Bank Corp. also announced an increase in its non-performing loan ratio.

According to reports, the shares of Agricultural Bank were noted down at HK$3.29, which means they fell down by 3.5%. The finished trading was found at HK$3.33. The share value of Bank of China Ltd. (3988) fell down by 1.9% and Industrial and Commercial Bank of China Ltd. announced its share value to be dropped by 1%. The shares of Construction Bank fell by 1.2% and Hong Kong’s benchmark Hang Seng Index was also amended with a little change.

As wrote by Barclays Capital analysts led by May Yan in a note today, “It is likely that banks will require more collateral or cash flows from local governments to support these ‘misclassified’ local government finance vehicle loans to avoid them from being downgraded to non-performing loans”.