The causes and countermeasures of non-performing loans

What are the causes and countermeasures of non-performing loans in commercial banks in my country? I will share it with you below. I hope you like it! Welcome to read!

1. Causes of non-performing loans

When looking for the causes of non-performing loans, on the one hand, the impact of the economic downturn on enterprises cannot be ignored; on the other hand, financial institutions have not yet implemented intensive cultivation in loan management, which also leads to the formation of non-performing loans. Important reasons for loans include insufficient pre-loan investigation, inadequate loan conditions, and inadequate post-loan management. We can summarize the following points:

1. The phenomenon of focusing on lending and neglecting management has not yet been eradicated

In the history of the development of financial institutions, there has always been a focus on business development and a neglect of risk management and control. The phenomenon of loan disbursement and light loan management. This is largely affected by the assessment orientation and methods. In terms of assessment orientation, although most financial institutions emphasize the requirement of matching returns and risks, the actual situation is that the scale assessment is preceded and intensive, and the quality assessment is subject to assets. Factors such as untimely classification and post-audit adjustments often lag behind, which to a certain extent promotes "short-sighted" behavior in operations, leading to the phenomenon of "emphasis on scale over quality" that occurs from time to time. In terms of assessment methods, most of them adopt the "pay the bill" method, which is directly linked to loan issuance, using loans to induce deposits, and loan returns, resulting in institutions focusing on investment and returns, excessive pursuit of scale expansion, and neglect of asset quality control requirements. At the same time, the tenure system for senior executives of financial institutions can also easily lead to the tendency to unilaterally pursue performance during their tenure. In the game between development and risk, risk management and control often give way to business development.

2 The concept of risk management has not yet been deeply rooted in the hearts of the people

Financial institutions are easily confused by "golden customers", such as not doing in-depth loans to monopolistic industries, enterprises, government projects, etc. According to the analysis, various means are used to lower access standards, adjust risk limits, and expand credit; post-loan management is relaxed, and the use of loans and business operations are not adequately monitored. In order to form a loan, they ignore the source, overly believe in and rely on the second source of repayment, and believe that as long as the loan is guaranteed, it is a good loan. They ignore that in practice, there are a large number of insufficient guarantee capabilities, "guarantee without guarantee" and difficult implementation problems. The valuation of collateral is too high and it is difficult to realize it. In the process of loan management, it is believed that "no interest arrears means a good loan", insufficient attention is paid to major corporate issues, no in-depth analysis of corporate cash flow, and inability to make timely and accurate judgments on loan risks, thereby losing the best opportunity for revitalization and disposal. . The phenomenon of long-term working capital loans is serious. After the loan expires, they blindly rely on re-lending, believing that "borrowing new money to repay the old one is the best solution". They turn a blind eye to the weak market competition and the deterioration of the company's operating conditions or have a fluke mentality. The result is the conversion of potential risks into real losses.

3 Insufficient credit process control

Process management is the top priority of modern commercial banks, and issues in process control are very worthy of study. For example, regarding the management and control of newly exposed NPLs, the assessment department, operating department, and disposal department seem to be performing their own duties. In fact, it is possible that everyone is responsible and no one can take responsibility. For example: the operating department has the management responsibility for the formation of non-performing products, but does not have to worry about handling and resolving them. The security department is responsible for handling and resolving the problems, but does not have to pay for the formation of bad things. If there are too many disposals, it is performance. The assessment department is not the operating department and cares more about numbers than numbers. The project itself.

4. The Importance of Credit Asset Risk Classification

The impact of the timeliness and accuracy of credit asset risk classification on asset quality and assessment should also attract sufficient attention. As we all know, the identification of non-performing loans is determined based on the risk classification results of credit assets. The results of risk classification affect the provision of impairment provisions. If the risk classification is inaccurate, non-performing assets will not be exposed in time, the provision of impairment provisions will be inaccurate, and the assessment of each operating entity will also lead to results being reflected first and penalties lagging behind. phenomenon.

5 Responsibility identification and accountability are insufficient

The identification of responsibility for credit business is a very serious and professional task, and it is an inspection of the entire process of credit business. and assessment. At present, the main problems we have in this regard are: first, the contradiction between a small number of personnel and a heavy workload; second, the test of a wide variety of business types and a large historical span of identified projects; third, the policy requirements and institutional basis for each stage If the grasp is not enough, when making responsibility determination, it is often restricted by the personal qualities of the responsibility determination personnel, and the quality of responsibility determination cannot be guaranteed.

Judging from the situation of accountability, the process from the formation of bad projects, identification of responsibility, to accountability is relatively long. The lag in accountability and the avoidance of important matters during accountability directly affect its seriousness and it is difficult to play its due disciplinary and educational role. Based on the situation of liability identification and investigation, it is not difficult to find that the responsibility identification process pays more attention to the inadequate post-loan management than the in-depth pre-loan investigation. The over-emphasis on the lack of due diligence in the details of the post-loan operation link has a negative impact on the loan. The shortcomings in the selection of former customers and the formulation of marketing strategies are avoided. At the same time, the scope of accountability and the intensity of punishment for front-line employees are far better than those for operators with decision-making power. Unfair and ineffective punishments have a negative impact on bad companies. The origination of loans also has a greater impact.

2. Countermeasures for the difficulty of collecting non-performing loans

To improve asset quality and curb the tendency of concentrated exposure of non-performing loans, we must identify the problem, put pressure on ourselves, and face the difficulties. The following tasks must be done well:

1. Solve the problems of understanding and mechanism, and make key breakthroughs

First, we must solve the problem of the relationship between returns and risks. While adhering to "development is the last word", we must improve the concept of "sustainable development", strictly control credit access, and strengthen credit rating and credit plan approval. Secondly, the pressure of risk management and control and the motivation for business development must be solved. Clarify the main risk points and due diligence requirements in each link of the credit business, and strictly identify and investigate responsibilities. It is necessary to prevent blind pursuit of business development and neglect of risk management and control, but also to eliminate fear of being too timid, formulate due diligence exemption measures, clearly define due diligence guidelines for different types of customers, and eliminate the work concerns of loan managers. Those who do not perform their duties, do not act when they should, or operate in violation of regulations, especially those who directly lead to the deterioration of asset quality due to insufficient work, must be strictly held accountable. Third, we must solve the problem of loan management mechanism construction. Further clarify the responsibilities and main risk points of relevant departments at all levels in loan management, establish a scientific, efficient, and clear responsibility management mechanism for credit marketing, access, approval and issuance, establish a post-loan enterprise risk assessment system, and establish a loan management system. Assessment and evaluation system, establish a reasonable loan management incentive system, issue due diligence guidelines for credit positions, and link assessment results with rewards and punishments for institutions and personnel. It is necessary to establish an information exchange and communication mechanism to prevent information asymmetry and information attenuation. Establish a regular risk warning meeting system so that credit risk events can be analyzed and judged in a timely manner, implement one policy for one household and multiple policies for one household, and increase incentives for the revitalization and disposal of non-performing loans.

2 Continue to consolidate the management foundation and improve the asset quality management and control system

On the one hand, strengthen research on national macro-control policies and key investment industries. Through research, we will find accurate target positioning, vigorously expand the market, accurately identify and effectively control risks, and improve the level of operation and management. On the other hand, scientific marketing strategies should be formulated to promote the optimization of credit structure. Formulate credit policies that are close to the market, segment markets and customers, and realize the transformation from "large to excellent", from focusing on large and medium-sized customers to paying equal attention to high-quality large and medium-sized customers and high-quality small and medium-sized enterprise customers. Since small and medium-sized enterprises are relatively weak in resisting market risks, their credit risks are closely related to industry prosperity. Therefore, we urgently need to strengthen research on the industry background of small and medium-sized enterprises, analyze and predict market development prospects, and strengthen risk mitigation measures. The third is to establish a scientific risk management incentive and restraint mechanism. Firmly establish the concept of effective balance between risks and returns, and improve risk management policies, systems and standards. Improve the accuracy, objectivity and timeliness of risk classification and make full provision for impairment. Make full use of risk management tools to improve the professionalism, refinement and scientific level of risk management, effectively resist the occurrence of credit risks, and promote the sustainable and healthy development of credit business. The fourth is to improve post-loan management capabilities. Post-loan management is the last line of defense for credit risk management and control. According to the frequency and depth requirements of post-loan management, we must pay close attention to the company's major risk events, pay attention to the company's major investment decisions, and pay attention to changes in the company's cash flow.

3. Increase efforts to deal with existing non-performing loans

To increase efforts to deal with existing non-performing loans, the first task is to curb the occurrence of newly exposed non-performing loans. Continuously consolidate and develop high-quality customer groups, and use sustainable development to improve the quality of credit assets from the source. Do a good job in risk monitoring and research on strategies for exiting important customers to avoid situations where potential risks turn into actual risks due to "death withdrawal" and "death withdrawal". Secondly, we must make full use of policies and use various means to indigest.

It is necessary to strengthen the research on policies and control of projects, apply appropriate policies to appropriate customers, make full use of new policies, new tools, and new methods to speed up the progress of disposal of non-performing loans, and steadily digest historical baggage. The third is to establish an incentive and restraint mechanism for asset quality control. Use policy levers to fully mobilize the enthusiasm of all parties, implement credit asset quality control assessment and responsibility restraint mechanisms for the leadership team, and implement responsible loan collection. Implement a reward and punishment system, improve the accountability system for credit asset quality control, strictly identify responsibilities, and fundamentally increase the enthusiasm for credit asset management.

How to write a description of the reasons for loan overdue?

There is no fixed format for overdue loan explanations. Just explain the situation and previous borrowings and overdue loan repayments. The reference format is as follows:

I (), have been in ( A loan with an amount of () was processed at () bank on () day () year), with a term of (). Due to ()'s failure to repay on time, it was overdue for () days, and then it was overdue on () month () day () year () month () day. Pay off all outstanding debts and interest. Through this loan, our company understands the importance of credit history and knows that the impact on our credit cannot be made up. I guarantee that the next loan will be paid off on time and a good credit record will be maintained.

Yours sincerely!

Borrower:

Year Month Day

The reason for overdue may be that the job has changed, resulting in a reduction in income and the inability to repay the loan ; Family members or borrowers die or disappear, and there is no repayer; the developer delays the delivery of the house, delays in applying for the property ownership certificate, or the purchased house has serious quality problems, and the home buyer refuses to repay the loan as a defense; some borrowers have poor legal awareness , deliberately defaulting on the loan; due to work reasons, being away from home for many years and being unable to repay the loan in time, etc.

Provide several methods to prevent overdue repayment.

1. Read the contract carefully.

When we sign a contract, we must read the contract carefully. First of all, we must read the repayment date clearly as soon as possible. We must remember the date of repayment. Secondly, we must also read the fine information clearly and understand it properly. , only by knowing these in your mind can you effectively avoid overdue items. Make repayments on time.

2. Link your frequently used bank cards for repayment.

Most people forget to repay rather than being unable to repay, so they can choose to link their bank cards and let the system automatically deduct the money. At the same time, they can choose to pay in advance on the repayment date. Fill in 2-3 to avoid overdue transfers.

3. Apply to the bank to extend the loan time.

If you happen to have a problem with your time, it is recommended that you contact the bank to explain your situation and whether you can apply for long-term repayment, so that you can avoid high penalty interest in the future.

4. Try to have the bank send you text messages to remind you of repayment.

5. Choose a financial services company with a strong sense of responsibility to help you apply for a loan, so that your financial advisor will help you remember the repayment date and remind you to make repayments.

What are the reasons for the non-performing loans of my country's commercial banks?

1. Decline in economic growth

Due to the obvious decline in domestic economic growth and the impact of economic structural adjustment, some There are financial risks in the industry. Economic growth is still relatively slow, which will affect the non-performing loan ratio of my country's commercial banks.

2. Government intervention in credit supply

In order to support the development of certain industries, the government affects the willingness of banks and commercial banks to lend, leading to the formation of some non-performing loans.

3. Credit and legal environment

Credit is an indispensable standard for the development of the entire national economy. As one of the core enterprises of the market economy, the credit environment of banks has a great impact on banks. Some loan customers in areas with poor credit environments lack integrity, have low moral standards, and have a weak foundation for corporate culture construction. Although their economic foundation is strong and their development prospects are good, their strengths cannot match their weaknesses, some of which are among them.

4. Operation and investment mistakes

The leaders of some units obtained loans from banks through relationships. However, their operating conditions are not ideal, resulting in the inability to obtain expected benefits, inability to repay loans on time, and even making the business unable to operate normally. In order to keep the business running, they had to borrow money from the bank again. In such a vicious cycle, a little carelessness in business operations will lead to the collapse of the company and the inability to repay bank loans.

Secondly, some companies conduct unreasonable analysis of the feasibility of investment projects, causing the investment to fail to achieve expected returns or even suffer losses, thereby turning the increased loans into non-performing loans and ultimately unable to repay them.

5. Banks lack awareness of risk prevention and control

For personal interests, individual employees pursue their own interests one-sidedly, weakening their risk awareness or luck. This is also an important reason for the increase in non-performing loans.

6. The state-owned enterprise system is an important reason for the non-performing loans of state-owned commercial banks. The largest debtors of state-owned commercial banks are state-owned enterprises. State-owned enterprises and state-owned commercial banks are both state-owned, and the property rights relationship is unclear. Enterprises’ demand for goods is unlimited, and unclear property rights relationships result in zero constraints on state-owned enterprise loans, resulting in high bank loan interest rates. On the one hand, this makes it more difficult for state-owned enterprises to repay loans on time, creating a vicious cycle of borrowing money without repaying it. On the other hand, due to the backwardness of the system, a large number of state-owned enterprise systems are out of touch with the market and cannot adapt to the development requirements of the market economy, resulting in large losses for state-owned enterprises. During the reform of the market economy system, a large number of state-owned enterprises closed down, state-owned enterprises went bankrupt, and a large number of state-owned commercial bank loan debts were avoided in restructuring activities such as acquisitions and leasing.

7. The bank’s risk awareness and prevention measures are weak, and its loan management is weak.

8. The quality of loan managers directly affects the control of non-performing loans. Due to the low quality of loan management personnel, the bank's business philosophy cannot be effectively implemented in loan management. For example, the bank lacks a serious and rigorous work style and fails to strictly follow loan procedures to approve loans, which leads to loopholes in non-performing loans. The high professional quality of loan management personnel is conducive to the safety, scientificity and effectiveness of loans.

The above is all the reasons for the formation of non-performing loans of commercial banks.

Non-performing loans are the general term for overdue loans, sluggish loans and non-performing loans. Overdue loans refer to loans that have not been repaid due to the stipulations in the loan contract (including loans due after extension), and sluggish loans refer to loans that have not been repaid because they are overdue (including loans due after extension) for more than the prescribed period, or Loans that are not overdue or overdue for less than the specified period but whose production and operation have been terminated and the project has been stopped; according to relevant regulations, non-performing loans are classified as non-performing loans.

Comprehensive explanation of 12 types of bad credit records. What are the reasons for loan rejection?

When reviewing personal credit status, banks and some lending institutions focus on records within 24 months. Generally, 6 overdue repayments are used to judge whether an individual has a bad credit record. Some banks will not grant loans if the loan is overdue more than 6 times in the last 24 months.

Some banks stipulate that if the loan principal or interest is in arrears for three consecutive periods or for a total of six periods or more, the loan will not be granted. However, some banks will affect the loan if it is overdue more than three times.

What are the 12 types of bad records:

1. Credit card payments have been overdue three times in a row and a total of six times;

2. A total of 2 to 3 monthly mortgage payments Months overdue or non-repayment;

3. Monthly car loan payments are cumulatively overdue or non-repayment for 2 to 3 months;

4. The loan interest rate is raised, but the original amount is still the same Paying the "monthly payment" resulted in overdue interest;

5. Failure to pay water, electricity, and gas bills on time;

6. TX behavior on personal credit cards;

7. Failure to repay student loans;

8. Failure to repay credit card overdrafts and mortgage loans on time;

9. When providing guarantees for third parties , the third party did not repay the loan on time; although you did not borrow the money, you provided a guarantee;

10. The personal credit report will also record some economic judgments. Therefore, financial problems such as debt arrears will also affect the credit record;

11. Mobile phone deductions are linked to bank card deductions. If the relevant procedures are not completed after the mobile phone is deactivated, it will become overdue due to monthly rent arrears. It will also cause bad records;

12. If the "Sleep Credit Card" is not activated, it will still incur annual fees. If it is not paid, it will produce a negative credit record; for example, after changing the card in a curve, the limit is not high, and you don't want to use it. If so, it’s best to call to cancel;

There are one of the following seven situations in credit reporting, which is the so-called blacklist of loans

The first type: personal registration within the last two years The letter cannot be overdue more than 6 times.

Second type: There is overdue information on the credit report for more than 90 consecutive days.

The third type: The credit report is currently overdue. In this case, major platforms often reject it immediately!

The fourth type: There is some special transaction information on the credit report. Generally, there are mainly "bad debts" and "frozen". "Bad debt" means that you may have long-term bad debts that have not been dealt with, and freezing means that your current account may have been sealed.

The fifth type: There is information about being executed. If the information about the person being executed occurred within the past two years, it means that the borrower has just been sued and has committed dishonest behavior.

Category 6: The credit report shows that the debt is too high. It is mainly judged by the loan balance and credit card overdraft limit. If the loan balance and credit card overdraft limit add up to a large amount, and the income gap with the borrower is relatively large, it will be judged by the lending institution as the overall debt is too high.

Category 7: There are more than 6 inquiry records within six months of credit reporting. This also shows that the borrower is short of money and is also on the high-risk list. So don’t check your credit report without any trouble.

There are four other situations in which overdue records can be eliminated immediately

1. Bank’s fault

The bank has committed negligent behavior. For example: (including but not limited to) credit card annual fee adjustment without notification, weekend system upgrades unable to debit, charges with overbearing clauses causing customers to be overdue?

The above situations are all bank errors, not entirely personal. responsibility.

2. Third-party repayment fails

Sometimes repayment through third-party institutions does not arrive in real time, and there will be a certain delay. For example, inter-bank counters and online banking transfers fail to repay. Failed to bind cross-bank automatic deductions.

Credit card inter-bank deductions will be transferred through third-party payment, and some third-party institutions have limits on transfer amounts, so this is really not something customers can blame.

3. The bill has not been received

Credit card repayments are generally based on the bill. If the cardholder does not receive the bank statement in time, including paper Bills, electronic bills, etc.

4. Overdue information caused by false information

Not all overdue items are caused by oneself. Sometimes it is due to lax review by lending institutions, resulting in personal information being used fraudulently. or the information is incorrect.

5. Credit card time tolerance causes overdue payment

So you must protect your credit. Without credit, you can’t do anything! If you have any questions, you can send me a private message

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