China's central bank is to grant about 400 billion yuan ($65 billion) worth of loans to commercial banks in a bid to maintain abundant liquidity and support the cooling economy, according to media reports over the weekend.

The People's Bank of China (PBC), the central bank, will issue loans of about 300 to 400 billion yuan via Pledged Supplementary Lending (PSL) to several commercial banks, Beijing Youth Daily said on Sunday, citing a report from China International Capital Corporation Ltd (CICC).

PSL is a type of supplementary lending instrument backed by collateral often with a maturity of three months to a year, used as a new tool by the PBC to regulate money supply and guide medium-term interest rates, similar to the central bank's existing re-lending monetary tool.

The PBC was not immediately available to confirm the news on Sunday when reached by the Global Times.

The amount of loans CICC projected is nearly double the amount estimated by earlier media reports. Previously, media reports had estimated the injection to be 200 billion yuan and conducted through Standing Lending Facilities (SFL), rather than PSL.

The PBC is set to grant 200 billion yuan of three-month loans to five or six listed banks via its SLF, Reuters reported on Friday citing unidentified sources, without elaborating which banks will receive the loans and when the injection will be made.

The loan via SLF is the second similar move to bolster liquidity in a month.

In mid September, the PBC granted a total of 500 billion worth of loans via SLF to the Big Five State banks including Industrial and Commercial Bank of China, China Construction Bank (CCB) and Agricultural Bank of China, the Xinhua News Agency reported on September 19 citing Wang Hongzhang, chairman of CCB. Wang confirmed that CCB received the injection.

"The new injection, if confirmed, is aimed at propping up lending to support the economy," Xu Gao, chief economist at China Everbright Securities Co, told the Global Times on Sunday.

Additional lending will tend to offset downward investment in property development and stabilize falling property prices, following the central bank's recent announcement to ease conditions for home loans, Xu said.

The PBC relaxed lending rules for second-home buyers on September 30 by granting a 30 percent discount on mortgage rates and cutting the down payment requirement to 30 percent from a minimum 50 percent, as long as second-home buyers have repaid their previous home loans.

Apart from stabilizing the property sector, the country has also taken initiatives since the beginning of this year to avert a deeper slide in the economy, including reserve requirement ratio cuts for selected banks and accelerated investment in railways and public housing programs.

The central bank's move to raise liquidity through PSL is "gestural" rather than a reflection of real intent to relax monetary policy, Liu Xiao, a senior analyst at Beijing-based Anbound Consulting, told the Global Times on Sunday.

The provision of additional liquidity, if realized, shows that the PBC will not take stronger stimulus measures such as cutting overall reserve requirements and lowering interest rates to spur the economy, as the market had previously speculated, Liu said.

China's economy is expected to grow by an annual 7.4 percent in 2014 compared with a 7.5 percent official target but still within a reasonable range, he noted.

The PBC stated on October 5 in meeting minutes of its latest monetary policy commission that it will continue a steady monetary policy and use multiple monetary tools to keep moderate liquidity in the market.

Other than helping the real economy, the major purpose of this injection is to boost confidence in the financial markets, specifically for the upcoming Shanghai-Hong Kong Stock Connect program, Lu Ting, chief China economist at Bank of America Merrill Lynch, told the Global Times in a research note on Saturday.

To ensure a good start of the stock connect program, it is best to have a stable A-share market, especially as the Hong Kong bourse has been heavily impacted by the slump in stock prices in the US and Europe, Lu wrote.