Caixin
Jun 12, 2018 07:24 PM

Regulators Pressure Banks to Speed Up Bad-Debt Recognition

While the country's big four state-owned banks have been rigorously defining loans as non-performing, smaller lenders including city and rural commercial banks have been far less stringent. Photo: VCG
While the country's big four state-owned banks have been rigorously defining loans as non-performing, smaller lenders including city and rural commercial banks have been far less stringent. Photo: VCG

Regulators are putting pressure on banks to be more rigorous in classifying their nonperforming loans (NPLs) as the authorities step up efforts to make China’s lenders come clean about the extent of their bad debts.

The China Banking and Insurance Regulatory Commission (CBIRC) has given city and rural commercial banks until the end of 2019 to classify all loans more than 90 days overdue as NPLs, but some local regulators are requiring lenders to comply even earlier, an employee with a city commercial bank in eastern China told Caixin.

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