"The system has started taking effect in limiting lending risks and enhancing financial supervision," the newspaper said, quoting Shang Fulin, deputy governor of the People's Bank of China, as saying.

He urged commercial banks to use the software, designed to monitor loans, letter of credits, acceptance bills and other instruments, the newspaper said.

The software could also help banks get information on borrowers' credit records, assets and previous share and bond issues, it said.

China, alarmed by the Asian economic crisis, has moved to strengthen the central bank's supervisory ability and instructed commercial banks to boost internal controls.