China's financial stability might be compromised if the railway ministry's considerable liabilities, especially those issued by banks, are not well managed, said banking officials and executives on Sunday.

Yi Gang, deputy governor of the central bank, said authorities must handle existing railway loans and bonds properly as the government splits the railway ministry into two organizations.

The administrative portion will be called the State Railway Administration and placed under the Ministry of Transportation, according to a report delivered to the National People's Congress on Sunday. It added that the railway ministry's commercial operations portion will be spun off as a new company called China Railway Corp.