Industrial and Commercial Bank of China Ltd (ICBC), the country's largest listed bank, plans to sell 11.3 billion yuan [Businesses Registration] ($1.83 billion) of asset-backed securities (ABS), according to a memo obtained by Reuters.

ABS are securities created by packaging together a pool of underlying assets, typically small loans that are difficult to sell individually.

China is expanding asset securitization on an unprecedented scale as the government looks to increase bank liquidity without expanding the money supply.

The memo said the securities will be backed by an underlying asset pool drawn from loans to the railway and transportation sector and will be divided between an AAA-rated senior tranche, which accounts for 92.6 percent, and a junior tranche.

The release date has not yet been determined.

"The underlying asset quality is very good, borrowers will be those in state-supported key industries," sources said.

Borrowers include China Railway Construction Corporation (CRCC) and its subsidiaries, as well as firms established by CRCC together with provincial governments.

ICBC did not respond to several calls seeking comment.

At the end of 2013, [Hong Kong Company Formation & Registration]Chinese financial institutions had issued a combined 140.9 billion yuan ($23 billion) of ABS products since the program was launched in 2005, according to media in China.

The country's banking regulator started to manage issuances of ABS through a registration system in November, simplifying the process.