Investors should take a rational look at the bank refinancing issue and avoid over-estimating the pressure it has on market liquidity, according to a report on the Shanghai Securities News.

Fears about the impact another wave of refinancing of listed banks would have on market liquidity intensified as Bank of Communications unveiled on Tuesday a plan to raise as much as 42 billion yuan (6.1 billion U.S. dollars), via a rights issue in Shanghai and Hong Kong, to bolster its capital.

Previously, the Bank of China had announced plans to sell up to 40 billion yuan (5.86 billion U.S. dollars) of bonds convertible to A shares to improve capital adequacy, and the China Merchants Bank had also announced plans to sell 22 billion yuan via rights issue.

Banks are being forced to rebuild their capital bases after last year's lending spree as regulators require a capital adequacy ratio of no less than 11 percent for the country's larger banks and 10 percent for its small-and-medium-sized banks.

Major commercial banks are being ordered to keep their core capital adequacy ratio at above 7 percent.

If the banks fail to meet the requirements, regulators could refuse to approve future expansion plans and limit the scale of their operations.

However, according to Wu Yonggang, an expert with Guotai Junan Securities, the A-shares could handle the refinancing pressure of 160 billion yuan and it wouldn't affect share prices of the banking sectors too much.

Wu Yonggang's estimate is based on the hypothesis that the Industrial & Commercial Bank of China and China Construction Bank won't seek to refinance in 2010 and exclude the possible impact of Agricultural Bank of China's listing.

"Refinancing is the growing pain of China's banking industry. Investors should view it rationally as it is good for the long-term development of the sector." a report from SooChow Securities said.

But SooChow Securities pointed out that there are several banks whose capital adequacy ratio are only slightly above the required level, and it is possible that they will join the refinancing wave this year.

Assuming the worst, China's 11 largest listed banks will have to raise at least 300 billion yuan (43 billion U.S. dollars) to meet the more stringent capital adequacy requirements, according to a report by CNN.