Study Of The Granting Credit Business Procedure And Risk Management Of Enterprise Groups Based On X Commercial Bank

As the process of economic globalization deepensand advances, there is much more space for the development of enterprises in our country. As an important form of enterprise organization, enterprise groups in China seize the favorable environment and development opportunities and gradually achieve very prominent positions in today’s economy. As an important participant of the market economy, enterprise groups soon become the high-grade target client of the commercial banks depending on its enormous scale, strong capacity and excellent prospects. However, as well as generous interests, group clients bring potential risks to commercial banks which is initiated by the complicated connections and interaction especially the frequent related-party transactions between its member enterprises. Numerous finance fraud cases that happened at home and abroad obviously reveal the weak risk management mechanism of commercial banks. This phenomenon also calls for the research of commercial banks’credit risk management for their group clients.This paper focuses on the problems of X commercial bank’s credit risk management for group clients. On the basis of summarizing the current research and theory, two case studies about X commercial bank granting credit to group clients was conducted. Results show that the complexity of enterprise groups, related-party transactions and guarantee out of self-interest increase the X commercial banks’ credit risk and the difficulty of monitoring it. Also, the impulses of profit maximum and the rigid risk management mechanism of commercial banks induce the credit risk. Inadequate supervision or guidance and the terrible condition of the whole social credit too put commercial banks at risk of granting credits.Based on the study about risk causes of X commercial bank’s credit business with enterprise groups, we carry out some advice on improving the risk management mechanism. X commercial bank may do some resource integration and implement the consolidated supervision and central management. At the same time, emphasis should be given to reinforcing internal control, establishing early warning mechanism, unclogging circulation channels, presupposing risk clauses and building a high-quality talent team. Moreover, the supervision department should intensify its function of resources integration so that a credit information query and sharing platform can be provided. An equally pressing measure is to accelerate the development of a social credit system to create a good social environment in which people all have a high level of integrity and honesty.