Stocks on the Chinese mainland fell the most in two months after the government said taming inflation is "critical".
China's high foreign exchange reserves are the major cause of excess liquidity.
China's top four State-owned banks lent 260.6 billion yuan ($40.1 billion) in new yuan loans in April, slightly higher than the 242 billion yuan issued in March, said a Reuters report.
Currency, financial markets set to be main topics at Sino-US meeting
China Minsheng Banking Corp Ltd said it has received the go-ahead from regulators to set up three more rural banking units.
The US quantitative easing policy makes it inappropriate for China to let the yuan float freely now.
China's central bank said on Wednesday that it would auction 6 billion yuan ($923 million) of three-month bills in its open market operations on Thursday, down from 11 billion yuan of such bills sold last week.
Hong Kong stocks fell 318.01 points, or 1.35 percent, to close at 23,315.24 on Wednesday.
China CITIC Bank , a second-tier Chinese lender, will cut property loans by at least a third in 2011 from last year, a bank executive said on Wednesday.
The growth of Chinese banks' foreign exchange surpluses from bank-to-client transactions accelerated in March, helping to contribute to China's rapidly expanding foreign exchange reserves.
China's major banks have largely met stringent new regulations concerning capital requirements, and no large-scale capital supplements are needed, an official with China's banking regulator has said.
South Korea's central bank is mulling investments in the yuan-denominated assets in a bid to brace for the internationalization of the Chinese currency in the long term.