BEIJING, (Reuters) – The impact of China Evergrande Group’s debt issues on the banking sector is manageable. Individual financial institutions’ risks exposures are small, a central bank official stated on Friday.

Chinese authorities have urged Evergrande that they accelerate asset disposals, and the resumption of all projects. Zou Lan from the People’s Bank of China (PBOC) also spoke at a briefing.

Zou stated that Evergrande blindly diversified and expanded its business.

The PBOC declared last month that they would defend the legitimate rights and interests homebuyers as Evergande’s financial crisis escalated.

The central bank and the regulator of banking said in August that they summoned Evergrande executives and requested them to correctly handle the debt risks. Zou’s Friday comments were the first time the central bank had made public statements about the developer since then.

He said that the financial institutions have had a decreased appetite to lend to property companies as a result of some risks faced by developers.

He stated that “the risk to Evergrande of financial institutions is small and the potential spillover effects for the financial industry are manageable.”

Evergrande needs to accelerate the disposal of assets and resumption building projects. The authorities will support project resumption financing, he stated.

Some lenders have had “misunderstandings” about the central bank’s debt control policies, causing financial strains for some firms as some new projects are unable to get loans even after firms have repaid existing loans, Zou said.

“This short-term extreme reaction is a normal market phenomenon,” he said.