Chinese regulator has urged the banks to offer loans to qualified property developers to help them complete housing projects, Reuters reported.

The move from the China Banking and Insurance Regulatory Commission (CBIRC) comes after home buyers across the country threatened to boycott mortgage payments for stalled property projects.

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According to the China Banking and Insurance News, the regulator is confident that with concerted efforts, “all the difficulties and problems will be properly solved”.

The regulator hopes to speed up the delivery of homes to buyers and stem the protests, which could spread the real-estate crisis to the banking sector.

Last week, regulators met with banks to discuss the issue, which could impact the stability of the financial system if more customers boycotted mortgage payments, according to analysts, cited by state media.

“The core issue here is for the government to step in quickly to boost confidence, to solve the problem at hand, and also provide more clarity to the market and investors on how this downturn in the property sector is going to be resolved,” Goldman Sachs Group chief China economist Hui Shan said in an interview on Bloomberg Television.

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“In a worst-case scenario, the issue could trigger systemic financial risk and social instability, given housing’s role as a bedrock of the broader financial system,” Teneo managing director Gabriel Wildau said in a note last week. “But our base case is that regulators will succeed in containing the crisis by strong-arming state-owned banks into supporting troubled developers so that they can complete stalled projects.”

Separately, the CBIRC is working with the finance ministry and the Chinese central bank to take steps to enhance the capitalisation of small and medium-sized banks, reported Reuters.

The regulator aims to speed up the issuance of special local government bonds to bolster banks’ resistance to risks.