Risk Research Of Domestic Factoring Business Of Chinese Commercial Banks

Domestic factoring business is a financing behavior based on assignment of receivables between parties in domestic trade. In recent years, with the rapid economicdevelopment in China, more and more domestic enterprises begin to understand and attach importance to the concept of supply chain; supply chain financing also develops gradually in this background, while the domestic factoring business, as an important component of the supply chain financing products, has become a key product of various commercial banks.However, in terms of the current development and operation situation of the factoring business in China, problems such as non-perfect policies and regulations, product singularity and non-standard business operation exist in the market environment, policy environment as well as domestic commercial banks themselves,eventually leading to frequent occurrence of risk events after the introduction of domestic factoring business by commercial banks. Therefore, in the current economic systemand policy environment, how to balance business development and risk control has become the focus of various commercial banks.This paper firstly makes an analysis on functions and business modes of the domestic factoring business, brings forward risks that exist in the domestic factoring business in combination with practical operations by commercial banks in China, and meanwhile introduces the most typical domestic factoring risk cases of commercial banks in China for analysis.Finally, this paper brings forward what commercial banks should do in the current environment to improve from the practical operation level, and proposesmeasures for risk prevention.Relevant knowledge on supply chain management and finance is utilized in this article and is applied to the concrete operation level of the commercial banks, having certain directive significance to the domestic factoring business thereof.