Reasons Of Forming Unperforming Loans In Commercial Banks Of China, And A Research On It’s Management Strategy

Non-performing loans has always been a common headaches to commercial banks around the world,and greatly affects these banks’ healthy development.It can lead to financial crisis,as what had happened in many developed countries.As for commercial banks in China,the topic of non-performing loans calls for serious attention as well,and the generative mechanism of it makes non-performing loans incurable.This article starts from the research background and the value of studying non-performing loans,elaborates on the definition,category and causes of the non-performing loans in commercial banks,and then sets the focus back in China-study the current state of the problem in China,and explore the causes.The study on the current situation of the nonperforming loans in China will be explained in two aspects: macro-and micro-.Macro-factors mainly include the peculiar economic structure in China,the unfavorable economic climate,the insufficiently developed regulatory body.In the micro perspective,a lack of risk control awareness,unsound motivation mechanism,and a blind confidence atmosphere among borrowers,jointly forms these non-performing loans.Further,the article makes a comparison of the data on balance of the non-performing loans and bad loan ratio in different periods,which leads to the conclusion that the balance of non-performing loans and bad loan ratios had been raising during the recent years,and the trend will continue for some time to come.Follow the analysis,the article gives advices on macro-and micro-policy levels to handle with non-performing loans of commercial banks in China.