China's banking regulator said the industry should serve China's economic restructuring and innovative businesses should not cross the line.

"Innovation in financial services should benefit the real economy, risk-control, and lawful right of depositors and investors. Innovation should not be used as tools to circumvent regulation. "said Shang Fulin,chairman of China Banking Regulatory Commission.

Shang said at a commercial lenders' annual meeting in Tianjin that there are four major types or risk including credit and liquidity businesses.

Shang urged lenders to speed up handling bad loans, and restrain high leverage. He also said lenders should keep improving their services to the public, and level out corporate governance.