HONG KONGBEIJING, Feb 21 Reuters Chinese banks have approved property development loans of 17.20 billion as part of a special mechanism to inject liquidity into the sector, but detailed statements show some loans to distressed developers are only adjustments of existing credit.

Banks are adjusting the repayment plans or extending the maturity of some existing loans and not granting new credits, bankers and developers said.

Launched last month, Project Whitelist, as it is known, allows city governments to recommend residential projects to banks as being suitable for financial support, and to coordinate with financial institutions to meet project needs.

It is a key plank of Beijing39;s efforts to revive a property sector reeling under a debt crisis and boost confidence, although adjusting existing loans will not ease the liquidity squeeze for distressed developers.

Late on Tuesday, the housing ministry said 214 cities nationwide had set up the mechanism, recommending more than 5,300 projects to banks.

Of this tally, development loans worth 29.4 billion yuan 4.09 billion have been issued, covering 162 projects in 57 cities.

It added that 123.6 billion yuan 17.20 billion of development loans have been approved, citing data from some of the stateowned and commercial banks.

Banks that decline any loans to the whitelist projects must explain their decision to the financial regulators, the ministry said.

Whitelist projects of distressed developers have also been granted…