Bad loans | Pro Laywers

The non-performing loan (Non-Performing Loan) , non-performing loans also refers to the non normal loans or loan refers to the borrower fails to repay the original loan agreement of commercial bank loan interest, or there are signs that the borrower may not press

The loan agreement to repay the principal and interest of the loan and the formation of commercial bank loans. Chinese was defined as the bad loans of non-performing loans, bad loans and overdue loans (that is, "one day more than two").

Introduction
The non-performing loan is a loan. In general, the borrower if the delay repayment of principal and interest for three months, loans that would be regarded as bad loans

Bad loans
Paragraph. In determining the non-performing loans of banks have been unable to recover, we should profit for cancellation. Overdue loans could not be recovered but has not yet been determined, it should be the provision for loan loss in the book.
According to the general rules of the people's Bank of China loans issued in July 27, 1995 "" (for Trial Implementation), the non-performing loan is overdue loans, bad loans and bad loans Chinese since 2002 the full implementation of loan classification system of five level, the system in accordance with the loan of the wind

The degree of risk, the bank credit assets into five categories: normal, attention, secondary, suspicious, loss. Bad loans mainly refers to the secondary, doubtful and loss class loan.
For a long time, the specialized banks Chinese credit funds basically is extensive management, non-performing loans have occupied a large proportion in the specialty of bank loans, the bad loan problem not only restricts the specialized bank to state-owned commercial hank, and

And has become a big hidden danger China in economic development, has to be solved but hard to solve. Has very important significance to analysis the causes of non-performing loans to promote China banking business mode from extensive to intensive change.

Type
Overdue loans
Refers to the overdue (including the extension after expiration) can not return loan (not including the bad loans and bad loans).
Idle loans
Refers to the overdue (including the extension after maturity) 2 years (including 2 years) above is still unable to return loans and loan although not due or overdue in less than 2 years but production

ICBC released a quarterly non-performing loan ratio dropped to 3.6%
The camp has stopped, projects have been stopped loans (excluding the bad loans).
The bad loans
Refers to the borrower and guarantor is declared bankrupt according to law, the compensation of emotion, fail to repay the loan in accordance with the provisions of the borrower or death; "the people's Republic of China Law on", the declaration of a person as missing or dead, with its property or estate settlement

Fail to repay the loan, the borrower; suffered major natural disasters or accidents, huge losses and cannot receive insurance compensation, is unable to repay all or part of the loan, or to the insurance settlement, failed to pay off the loan lender according to law

The loan collateral, pledge from the proceeds are not enough to offset mortgage, pledge loans by the project approval; the write off of loans.

Analysis of the causes
The ideological roots
"Bank money is the country's" wrong
In Chinese economic life, many people believe that money in the bank is a national, not only many enterprises, the Department in charge of the enterprise and local departments of the party and the government think so, even some of the cadres and workers China bank also think so. When asked to enterprises

Sector loan is where come of, many enterprises responsible person will not hesitate he said is for the state, some state-owned enterprises leaders even thinks, state-owned enterprises by state-owned banks money, is like a man threw his money from one pocket

To another pocket, could not pay nothing. The assets of state-owned banks are regarded as state-owned assets, the state-owned bank money is considered the name "male", this is the thought root China bank non-performing loans generated.
In fact, people from the national bank credit funds can be seen, very little of its own funds in the sources of credit funds in the proportion of state bank, national bank money comes mainly from deposits, deposits in the sources of credit funds of National Bank

The proportion of about 60%, while the deposit is more than a half of savings deposits, savings deposits in the state banks in the sources of credit funds accounted for about 1/3 of China, money in the bank is mainly depositors' money, the assets of state-owned banks is not

The name "male", but the name "private". China bank is mainly loans with deposits money, the bank is only a "pool", on the one hand, as the debtor put together depositors' money, on the other hand, as the creditor will loan the money to the borrower

People, in this sense, banks provide loans to not the loan customers, is the depositor's irresponsible behavior, and even can be said to be the depositor's crime.
Objective reasons
The borrower's credit concept is not strong, solvency is too low
For a long time, Chinese enterprises has not been truly autonomous, self financing the main body of market competition. After the reform and opening up, the situation may be

People's Bank of China
Improved, but did not fundamentally changed, some enterprises for bank credit funds "big" ideas are still quite serious, credit concept is not strong, mainly for the "Daobi" bank loans, evasion of bank debt.
Some enterprises credit concept is not strong, and Chinese lack of non credit enterprise and its responsible person severely, effective sanctions, and the solvency of enterprises is too low, there is a direct relationship between. The cause of the solvency of enterprises is too low is many

Surface, have their own reasons, but also the causes of enterprise external, such as some enterprises or projects have no feasibility study carefully, conclusion or feasibility study is not, but some leaders are patting chest, resulting in decision-making mistakes; enterprise

Poor management, input and output rate is low, the benefit is not good; enterprises social burdens and other heavy burden, to bear part of the policy function, so that a large number of funds of enterprises shall be used for non productive expenditure, etc.. In fact, China Enterprises

The debt burden is very heavy, and there are more and more serious situation, many enterprises Chinese has does not have complete solvency, not all debts owed, and the survival and development of enterprises, we must try to increase its capital source, reduce

Its debt burden, in this case, the enterprise bank loans in arrears, evasion of bank debts is inevitable.
Therefore, to reduce the debt burden of enterprises with the necessity and urgency. But the legitimate rights and interests can not damage the banks to reduce the debt burden of enterprises, not to the evasion of bank debts as the main approach to reduce the debt burden of enterprises. Bank debt

Equity can greatly reduce the debt burden of enterprises, but is not desirable for the banks, because "the people's Republic of China Commercial Bank Law" expressly prohibited commercial banks within the territory of the China business investment or engaged in trust investment and stock business, bank debt

The right to share the law does not allow. Bank debt to equity is actually the bad debts of banks into negative equity, just change the form of the non-performing assets of banks, will not only help to reduce the risk of bank assets, but will

Increase the risk, because once the bankruptcy of the enterprise, bank creditor's rights can also went bankrupt property liquidation according to a certain proportion, and bank holdings of corporate equity is likely to become a piece of paper, and bank staff itself is tight, familiar with enterprise production and management activities

The talent is extremely scarce, banks can not effectively and directly involved in the production and management of enterprises.
The main reason
The bank management level is not high, risk prevention ability is not strong
The main reason of non-performing loans is the bank management level is not high, risk prevention ability is not strong, the non-performing loan is the inevitable result of extensive management of bank loans. Seen from the inside of the bank, causes of non-performing loans is also a lot of

Extensive management, loan is the main reason, the loss of credit assets to a certain extent, is the result of the expansion of bank self. Such as 1984 by the end of the credit control is the bank's own making, many of the loans were issued have assault precipitation.

Loan risk awareness is not strong, most lending for credit, and though secured loans in the proportion of increase, the effectiveness and safety of the loan is still a problem, guarantee loans loans low; "three check" credit management system

Degree is not perfect or performing a mere formality, divorced from the lending right, responsibility, benefit, re - light tube, reproducing light collection, light heavy deposit loan; credit team overall quality is not high, some master lending power bank staff service quality is poor, resulting in lending

Making mistakes or even loan deceived, or can not effectively stop the enterprise debt, because some thought quality is poor, issued the "human" loans, even at the cost of loan to seek personal gain, resulting in the loss of credit assets, etc..
The important factor
Administrative intervention of government departments, financial departments extrusion
China credit funds extensive management, in addition to the presence of people above mentioned enterprises "Daobi" expansion and bank self expansion, there are government departments

Bad loans
"Shun forced expansion and fiscal expansion", the Department in charge of the enterprise and other departments of the "cross.". The bank was forced to issue "administrative intervention loan". "Unity" loans, financial credit, which is an important external Chinese of non-performing loans.
Enterprises in the China past political, economic system, the local party and government leaders, in order to obtain the local economic growth, will require banks to provide loans to support, the extensive mode of economic growth is the result of extensive business loans. In the new form

Potential, some local party and government leaders of local protectionism and departmentalism serious thinking, only to consider the area of local and immediate interests, "protective umbrella" for some enterprises evasion of bank debts, on the banks of the preservation of assets work out,

But Chinese existing laws on the protection of the debtor creditor is obviously not enough, the lack of restraint, the protection of the bank claims are not legally sufficient support.

Analysis of the status quo
The basic concept of the non-performing loans of state-owned commercial banks
Bad loans is the borrower fails to repay the original loan agreement of commercial bank loan interest, or there are signs that the borrower may not according to the original loan agreement to repay the loan principal and interest and the formation of commercial bank loans.
China has become the non-performing loan is defined as the doubtful loan, doubtful loans and overdue loans (that is a spent more than two of the total). Since 2002 China's full implementation of loan classification system of five level, the system according to the degree of risk of loan, the bank credit assets

Divided into five categories: normal, attention, secondary, suspicious, loss. Bad loans mainly refers to the secondary, doubtful and loss class loan.
Estimation of the non-performing loans of state-owned commercial banks
China's state-owned commercial banks to reduce bad loans in many did a Kung Fu, such as the attempt to formulate strict credit management system, full program of reform of credit business, provisions to reduce non-performing loans indicators. But the state-owned commercial bank not

Good assets are still high, especially for the four major state-owned banks. 2004 years, the balance of bad loans of commercial banks to reduce 394600000000 yuan, down 4.56 percentage points, to 13.2%. This ratio has been much higher than the average water world banking

Flat, and the balance of non-performing loans ratio banking system remains high, not only has exceeded the "Basel Protocol" requirement, should be maintained at 5% the following requirements and bad bank and international advanced loan ratio. If we consider the National Commercial Bank

Factors for foreign figures relatively conservative, that our country commercial bank asset quality is one can imagine.

Influence
According to the experience of Japan, Chinese economy like the Japanese are weighed down by bad loans. Now, more and more people saw the harmfulness of bad assets.
1, high non-performing loan rate, the greatest harm is influence on economic support ability of banks. Chinese bank loans is extremely cautious, because too many non-performing loans, bank lending capacity effect.
2, if to solve the non-performing loans by issuing base money, easily lead to inflation. If the let down, a lot of social morality has also evoked the risk of bad loans, if deal with bad loans and may cause

Since the chain enterprise bankrupt, increasing financial risks and social crisis.

The solution
1, strengthen the financial business supervision, to ensure the future of every loan quality, prevent new bad loans.
2, increase the system reform China enterprises, strengthen enterprise management and competitive mechanism.
3, appropriate to adopt expansionary monetary policy, to save the enterprise blood transfusion, which make the dead come back to life.
4, issue the monetary base, dilute non-performing loans.
The third and the fourth way is to increase the money supply, inflation offset by bad loans, and active China economy, make the economy increase vigor.

Related data
As of 2003 the balance of bad loans of all the major domestic commercial banks and non-performing loan ratio
Unit: million yuan
　　
Name of Bank Loan The amount of non-performing loans The rate of bad loans
Industrial and Commercial Bank of China 29578.37 7598.78 21.56%
Construction Bank China 17663.88 2679.60 11.90%
Agricultural Bank of Chinese 19129.60 6982.03 30.07%
Chinese bank 18161.89 4085.31 18.07%
Total 84533.74 21345.72 25.26%