SHANGHAI (Reuters) - China's central bank will strengthen its supervision of real estate financing to promote healthy development of the property market, People's Bank of China Vice Governor Chen Yulu was quoted saying on Tuesday.

Chen told the Securities Times that after years of practice in loan securitisation the time was ripe to experiment with non-performing loans (NPLs).

He said in the interview the PBOC would work with other agencies to promote a pilot scheme to securitise NPLs.

Chen said it was wrong to simply attribute recent home price increases in some major cities to monetary policy, noting other factors including unbalanced urban development, households' need to invest and store value, and media hype.

Loan growth during the first two months of this year was basically in line with the current economic situation and inflation, Chen said.

The PBOC would continue to keep a close eye on the property market, Chen told the newspaper, but did not elaborate on specific issues.