Non-performing loan ratio refers to the proportion of non-performing loans of financial institutions to the total loan balance. This indicator is used to calculate the caliber data of local and foreign currencies.
Non-performing loans refer to loans that have been defaulted. Generally speaking, if the borrower fails to repay the principal and interest within three months, the loan will be regarded as a non-performing loan. When banks determine that non-performing loans cannot be recovered, they should write off these loans from profits.