Photo taken on May 16, 2016 shows a real estate project in Hangzhou, capital of east China's Zhejiang Province.Photo:Xinhua

The People's Bank of China (PBC) and the The China Insurance Regulatory Commission (CIRC) have issued a notice encouraging  banking and financial institutions to provide financial support and services for mergers and acquisitions of key real estate enterprises to dissolve the risks, Shanghai Security News reported on Monday. 

The notice focused on encouraging high-quality real estate enterprises to merge or acquire high-quality projects of large real estate enterprises that have encountered risk management and operation difficulties. 

The move is aimed at "downsizing" the real estate enterprises with poor management and not yet on the verge of bankruptcy in a bid to prevent and resolve risks, the article said, citing people familiar with the matter.

The notice also stressed that banking financial institutions should carry out mergers and acquisitions loans services in a managed and orderly manner, in accordance with the principles of legal compliance, controllable risks and sustainable business.

The PBC and CIRC also held a meeting on promoting the steady and orderly M&A loan business with major banks. The meeting has called for banks to avoid the practice of blindly withdrawing loans from large real estate enterprises facing risks and operating difficulties.