Research On The Prevention And Control Of Non-performing Loans Of Commercial Banks In China

Commercial banks are the core of Chinese financial institutions, deposit and loan business is the core business of China’s commercial banks. Every year, thousand trillion of loan are offered to real economy by Chinese commercial banks. It is such a huge amount of money and loan, Chinese commercial banks should deal with the risk management seriously. Chinese commercial banks are the state monopoly policy banks, controlled by the Central Bank in China, and the marketization need to be further liberalized in the reform. As a result, Chinese commercial banks offer loans to some high risk, lower income projects for the country’s policy or government policies. Chinese current non-performing loan balance is 843 billon yuan, increase 251 billon yuan from the start of the year, the commercial banks’rate of non-performing loan stands at 1.25 percent, but the potential risk of debt is still high, the local government debt has reached 12 trillion yuan, in which 80 percent is provided by the bank directly and indirectly, the risk of local government debt also made generating pressure to commercial banks too. In addition, because of the industrial structure adjustment and environmental protection policy, Chinese traditional manufacturing are growing very slow, and the enterprises’pressure to repay loan is increasing. The complex international economic environment and Chinese economic growth slowdown also make the national commercial banks non-performing loans facing greater pressure.The commercial banks’market level isn’t high in our country, and the mixed operation is not fully liberalized, the complexity of the loan risk is slightly lower than that of foreign commercial banks. However, our economic environment and the imperfect financial system means that commercial banks need to control their own non-performing loan from multiple channels and multiple links. Based on this, this paper studies the non-performing loans of commercial banks in China. This paper is divided into five parts. The first part is the introduction, which mainly introduces the background and significance of this study, the related research findings, the research contents and methods. The second part is the basic theory, expounded the main concepts and theories involved in this paper. The third part analysis the induced factors of the commercial banks’bad loans in China, and analyzes the cause of Chinese commercial banks’non-performing loans from four levels. The fourth part is the situation analysis and suggestion, firstly, this part elaborate the basic situation it occurrence and the concrete management of the bad loan in our country, Then analysis how to digestion, prevention and control the risk of non-performing loans in Chinese current economic situation. In the fifth part, elaborate the measures control and reduction Chinese commercial banks’ non-performing loan from five aspects.