BEIJING — Banking institutions in China have put aside 6.5 trillion yuan (about $996.2 billion) of bad loan provisions to fend off risks, according to the country's top banking regulator.

In the first nine months of 2020, some 1.5 trillion yuan have been added to provisions for credit losses, an increase of 206.8 billion yuan year-on-year, data from the China Banking and Insurance Regulatory Commission (CBIRC) showed.

The CBIRC said it has urged banks to strengthen loan provision to prepare enough ammunition to settle bad loans in wake of the impact of the COVID-19 epidemic.

The provision coverage ratio of Chinese commercial banks, the ratio of provisioning to gross nonperforming assets which indicates the extent of funds a bank has kept aside to cover loan losses, stood at 179.9 percent at the end of September.

The nonperforming loan ratio of China's commercial banks came in at 1.96 percent at the end of the third quarter of 2020, slightly higher than the 1.94 percent by June.

Chinese banking institutions have settled a total of 7.5 trillion yuan of bad loans since 2017, CBIRC data showed.