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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II MONITORING ON THE NON-PERFORMING ASSETS CHAPTER III ANALYSIS ON NON-PERFORMING ASSETS CHAPTER IV CHECKING ON THE NON-PERFORMING ASSETS CHAPTER V RESOURCES OF DATA AND INFORMATION AND THE TIME FOR SUBMITTING THE ANALYSIS AND CHECKING REPORTS CHAPTER VI MANAGEMENT OF NON-PERFORMING ASSETS AND SUPERVISION LIABILITY CHAPTER VII SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. The present Measures are hereby formulated in accordance with the Banking Supervision Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, and other relevant laws and administrative regulations, for the purpose of strengthening sustainable, prudent and effective supervision over commercial banks, promoting the commercial banks to perfect internal control system, improving the quality of assets, and preventing risks. Article 2. The present Measures shall be applicable to all levels of supervisory authorities of China Banking Regulatory Commission (hereinafter referred to the CBRC) for their monitoring and checking of the non-performing assets of commercial banks and of their branches. Article 3. The monitoring and checking of the non-performing assets of commercial banks shall include the overall monitoring and checking of the non-performing loans, non-credit assets and off-balance-sheet risks. Article 4. The non-performing loans shall be implemented strictly in accordance with the standards of five-level classification of loans, and the standards for classification of the non-credit non-performing loans shall be formulated additionally by referring to the five-level classification standards of loans before the formulation. CHAPTER II MONITORING ON THE NON-PERFORMING ASSETS Article 5. Commercial banks shall take effective ways to monitor the non-performing loans item by item and in real time, and monitor the variation conditions of the non-credit assets and off-balance-sheet risks, as well as make direct monitoring over the major institutions and clients. All levels of supervisory authorities of the CBRC shall establish and improve the system of monitoring and checking of non-performing assets. Article 6. The major institutions include: the branches of a bank whose rate of non-performing loans is in the leading five; the branches of a bank whose balance of non-performing loans is increasing instead of decreasing or whose rate of non-performing loans is rising instead of falling; the branches of a bank whose estimated loss rate of non-credit assets is in the leading five; and the branches of a bank whose management on off-balance-sheet business is in chaos, and who have acts in violation of laws and regulations. The major clients shall include: clients whose balance of non-performing loans is over RMB a hundred million Yuan or the group clients who have over 5 connected enterprises, and the total balance of loans thereof is over RMB a hundred million Yuan. CHAPTER III ANALYSIS ON NON-PERFORMING ASSETS Article 7. The supervisory authorities of the CBRC at all levels, commercial banks and their branches shall make analysis on the non-performing loans by month, and analysis on the non-performing assets by quarter, and make overall judgment and appraisal on the risk status and variation trend of the banks, and lay focus on accounting for those loans with serious risk status and obvious variation, and make an analysis report. The analysis on the non-performing assets shall include three parts including the analysis on non-performing loans, analysis on non-credit assets risks and analysis on off-balance-sheet risks. Article 8. The analysis on non-performing loans. It shall mainly include the following contents: (1) Basic conditions: Balance of current loans, balance and proportion of non-performing loans and the variation conditions in comparison with those of the previous term and of the beginning of the year. If there are great alteration and abnormal conditions in the overall trend, regional distribution and industrial distribution, analysis shall be focused on the reasons; (2) Conditions of the structures of the regions and of the clients. All the commercial banks shall itemize and analyze the top ten first level branch banks whose balance or proportion of non-performing loans is higher, and the 10 clients who have the maximum balance of loans or balance of non-performing loans. Each of the banking regulatory bureaus shall determine by itself the regions and number of clients according to the actual conditions; (3) Conditions of settlement and collection and transformation of the non-performing loans. Analysis shall be made respectively according to cash settlement and collection, loan cancellation after verification, paying debts in capital or by other means; (4) Quality of newly granted loans. A continuous monitoring and analysis shall be made on the quality of loans granted since 2003 and on the conditions of newly granted loans in the current year; (5) Analysis on the internal and external reasons for the newly occurred non-performing loans and the typical cases in this regard. The external reasons shall include: the poor operation and management or bankruptcy and closedown of the enterprises, evasion of repayment of bank loans by enterprises, violation of laws and regulations by enterprises, and the administrative interference of the local governments, etc. The internal reasons shall include: violation of the "three examinations" system of loans, violation of the provisions on authorization of loans or loan granting, and violation of laws by bank employees, etc.; and (6) Making prediction on the variation trend of the non-performing loans, putting forward measures and opinions for the work of the management or supervision over the non-performing loans. Article 9. Analysis on non-credit assets risk. It shall mainly include the following contents: (1) Basic conditions. Balance of current term non-credit assets, balance and proportion of non-performing assets or of estimated losses, and the variation conditions in comparison with those of the previous term and of the beginning of the year. If the non-credit non-performing loans of the current term and the estimated losses vary greatly, analysis shall be made on the reasons thereof, especially on the variation conditions for various assets to be handled or to be cleaned up, or the business accounting capital under the receivable headings; (2) Analysis on the regional structure. All the commercial banks shall itemize and analyze the top ten first level branch banks whose balance and proportion of non-credit non-performing assets or of estimated losses is higher. Each of the banking regulatory bureaus may determine by itself the number of the regions according to reality; (3) Analysis on settlement and collection or disposal of non-credit non-performing assets; (4) Analysis on the reasons for newly occurred non-credit non-performing assets since 2003, especially the problems in internal risk control and the typical cases in this regard; and (5) Prediction on variation trend of the non-credit non-performing assets and the estimated losses, and measures and opinions for doing well the work of the management or supervision over the non-credit assets. Article 10. The analysis on off-balance-sheet risks. It shall mainly include the following contents: (1) Basic conditions. The balance of various off-balance-sheet businesses in the current term, balance and proportion of the imprest or losses, and the variation conditions in comparison with those in the previous term and in the beginning of the year. And statements shall be focused on the off-balance-sheet business whose balance of imprest is on the rise; (2) Analysis on regional structure. All the commercial banks shall itemize and analyze the top ten first level branch banks whose off-balance-sheet business develops more quickly and to whom more imprests have occurred. Each of the banking regulatory bureaus may determine by itself the number of regions according to reality; (3) Analysis on reasons for the existing of imprest for off-balance-sheet business, especially the problems in internal risk control and the typical cases in this regard; and (4) Prediction on the variation trend of the imprest for off-balance-sheet business, and measures and opinions for doing well the management or supervision of the off-balance-sheet business. CHAPTER IV CHECKING ON THE NON-PERFORMING ASSETS Article 11. All levels of supervisory authorities of the CBRC shall check the non-performing assets and their management of the commercial banks and their branches by quarter. Article 12. The checking on non-performing assets shall include the checking on quality of loans, quality of the non-credit assets, and quality of the off-balance-sheet business. The contents for the checking shall include checking the balance and proportion of non-performing assets, and reflecting the progress of the banks being checked in two aspects including horizontal and vertical comparisons. Article 13. The loan quality indicators for checking shall include the proportion of non-performing loans, variation of the proportion of non-performing loans, variation of the balance of non-performing loans, variation rate of the balance of non-performing loans, variation range of the balance of non-performing loans, variation range of the proportion of non-performing loans and the progressive rate of cash settlement and collection. The non-credit assets quality indicators for checking shall include: proportion of the non-credit non-performing assets, variation of the proportion of non-credit non-performing assets, variation of the balance of the non-credit non-performing assets, variation rate of the balance of the non-credit non-performing assets, variation range of the balance of the non-credit non-performing assets and variation range of the proportion of the non-credit non-performing assets. The quality indicators for checking the off-balance-sheet business shall include: the proportion of imprest for off-balance-sheet business, variation of the proportion of the imprest, variation of the balance of the imprest, variation rate of the balance of the imprest, variation range of the balance of the imprest and variation range of the proportion of the imprest. Article 14. The supervisory authorities of the CBRC at all levels shall, according to the progress of the checking on non-performing assets of the commercial banks, make comprehensive appraisal on the non-performing assets of commercial banks and their management, and submit the report on non-performing assets checking by quarter. The conclusion on the non-performing assets checking shall be taken as the major reference for annual examination and appraisal on commercial banks. Article 15. The supervisory authorities of the CBSR at all levels shall hear the report of the commercial banks within their own jurisdictions on variation of the non-performing loans by taking the way of appointment and talks each quarter or periodically according to the risk status, and circulate a report on the conclusion of the checking of non-performing assets to them, and put forward opinions for preventing and resolving the non-performing assets. CHAPTER V RESOURCES OF DATA AND INFORMATION AND THE TIME FOR SUBMITTING THE ANALYSIS AND CHECKING REPORTS Article 16. The data and information of the reports on analysis and checking of non-performing assets shall come from the non-spot supervision statistical report, other statistical statements required by the CBRC and the report on analysis of non-performing assets submitted by commercial banks. Article 17. The supervisory authorities of the CBRC at all levels shall make verification on the major data according to the information they know and through on-the-spot examination. In case of any major adjustment, they shall make explanations on the analysis and checking reports. Article 18. The parent banks of all the commercial banks shall submit the analysis report on non-performing loans of the last month to the CBRC before the 15th of every month, and report the quarterly and the annual analysis reports on non-performing assets respectively within 20 days after each quarter and within 30 days after the year. All the banking regulatory bureaus shall, before the 15th of every month, submit the report on analysis of the non-performing loans to the CBRC, and submit the quarter or annual analysis and checking reports respectively within 20 days after the quarter, and within 30 days after the year. In case there is great alteration in the non-performing assets within their jurisdictions, they shall make a report in time. The time for the branch of a commercial bank to submit the analysis report shall be determined by each banking regulatory bureau. CHAPTER VI MANAGEMENT OF NON-PERFORMING ASSETS AND SUPERVISION LIABILITY Article 19. Commercial banks shall strengthen management on non-performing assets, and submit the analysis report on non-performing assets to all levels of supervisory authorities of the CBRC on schedule, and report the great events in time, and ensure that the data of non-performing assets be true and accurate, the analysis on reasons thereof be complete and deep, the trend analysis be reasonable and scientific, and the measures be timely and effective. Article 20. Where a commercial bank and its branch fails to submit the report according to the requirements of the present Measures or disguises great events and does not make report, the CBRC shall give them punishments in accordance with the Banking Supervision Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks, the Measures for the Punishment of Financial Illegal Acts, and other laws, regulations and relevant financial rules. The CBRC shall, for the main responsible person and the relevant person liable of the institution occurring acts in violation of laws and regulations, give them warnings or impose a fine, cancel their qualifications for holding the posts of senior management personnel, or order the commercial banks according to the power of leadership supervision to give disciplinary punishment. If they commit a crime, they shall be prosecuted for liabilities according to law. Article 21. The supervisory authorities of the CBRC at all levels shall establish a responsibility system for professional supervisors according to the credit assets, non-credit assets, and off-balance-sheet business, and submit the reports on analysis and checking of non-performing assets of the commercial banks within their jurisdictions to the upper level organs. Article 22. Where a commercial bank or its branch who has large amount of non-performing assets, is in poor operation and management, and serious cases occur, the supervisory authorities of the CBRC at all levels shall take effective supervision measures, including suspending the examination and approval for the establishment, upgrading, or launching of new business of the institutions, etc.. Article 23. Where a supervisory department fails to submit the reports on analysis and checking of non-performing assets in time, the upper level organs shall circulate a notice of criticism to it. If it disguises the serious events and fails to make the report, it shall be imposed upon an administrative punishment according to the relevant provisions. If a crime is constituted, it shall be prosecuted for liabilities according to law. CHAPTER VII SUPPLEMENTARY PROVISIONS Article 24. All the commercial banks may formulate corresponding detailed implementation rules according to the present Measures. Article 25. The CBRC may make adjustment on and amendment to the present Measures according to the reality of supervision so as to ensure the validity of the supervision. Article 26. The power to interpret the present Measures shall remain with the CBRC. Article 27. The present Measures shall be implemented as of the date of promulgation. |
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