Regulatory measures to curb China's shadow banking growth appear to be having an effect and have prompted a shift in credit activity back to the formal banking system, Moody's Investors Service said on Thursday.

But Total Social Financing (TSF), of which shadow banking is a component, continued to grow more quickly than nominal GDP, leading to higher overall leverage in the economy, the ratings agency said.

"Although shadow banking has continued to grow, it has done so more slowly in recent quarters as regulatory measures to rein in the sector's growth appear to be having an effect," Michael Taylor, Moody's chief credit officer for Asia-Pacific, said in a news release.

The ratings agency estimated that shadow banking assets reached 45 trillion yuan ($7.25 trillion) at the end of 2014, amounting to 71 percent of the GDP, compared to 66 percent at the end of 2013.

"Maturity mismatches and contagion risks to banks are two of the most concerning factors in the shadow banking system," it said.

"Risks from property sector exposures remain elevated with an ongoing downturn in the sector and slowing GDP growth. Real estate and infrastructure account for one-third of all trust loan exposures," said the news release.

It also noted that financing activities were shifting to new areas, such as e-financing platforms and margin financing in the equity market, which has helped fuel a blistering rally in shares in the mainland.

Banks are indirectly financing some of this lending through their short-term purchases of loan assets from securities firms.

The share of margin finance in the daily stock transaction surged to above 16 percent at end-2014, from an average of only 7 percent in 2013, it said.

Data from the central bank showed cautious Chinese banks issued far less credit in December, driving cash-starved companies into the shadow banking system in a blow to the government's efforts to crack down on the risky sector.

The China Banking Regulatory Commission on January 16 initiated a draft consultation over the management of entrusted loans at commercial banks, which indicates that the authorities are stepping up efforts to supervise the shadow banking sector, experts said.

Entrusted loans are off balance sheet and are organized by an agent bank between a borrower and lender.