Research On Credit Risk Management Of Z Branch Of Agricultural Development Bank Of China

Agricultural Development Bank of China is an important component of China’s rural finance, which plays an important role in promoting rural economic development, increases farmers’ income and improving rural infrastructure construction. Agricultural Development Bank is committed to serve the "three rural issues" and solve the market environment problems of agriculture, rural areas and farmers. Currently, in order to secure sustainable development of the Agricultural Development Bank, controlling the bank’s credit risk management is a major challenge and involves crucial problems that the bank needs to consider.Combining the current situation and loan classification procedure This article starts with an introduction of research background, summarizing domestic and foreign researches; followed by the analysis of characteristics of Z bank’s credit risk and description of reasons and existing issues of Z bank’s credit risk management, such as policy risks, lack of sources of credit funds. the innate asset heavy burden and the risks from the prices of grain and oil market. Furthermore, combining the current situation of Z bank’s risk management system, this article describes the four problems related to credit risk management. First, regulations related to credit risk management is not robust and loan risk management responsibility is unclear. Second, credit approval process lacks constraints and risk monitoring means are out of date. Third, the bank lacks means to resolve risk and compensation and distribution channels of risk are limited. Fourth, in terms of personnel quality, overall risk awareness and ability of management of clients is lackluster; also lacking in terms of effective execution, team building, and business development. The concluding remarks put forward several design schemes after combined with the actual situation of Z bank loan risk management. The first is to improve the comprehensive risk management system and policy execution. The second is to improve the credit risk warning system, and developing the credit risk quantification methods and stress test methods. The third is to establish the access system of policy loans, in which the loan must be accurate in terms of status and quantity, and construct quantified loan review procedures. The fourth is the establishment of systematic credit funds management mechanism. The fifth is to establish a full risk management culture, cultivating staff awareness of risk management, and establishing an effective incentive mechanism of credit constraint.Using the strategies of risk management of policy credit loans as a starting point, the article puts forward some suggestions and countermeasures on the basis of the "three rural issues" and improving self-sustainable development. Because it is only a reflection of the current situation of Z bank’s issues, it can only put forward some suggestions at the micro level and still needs to be improved in practice.