Liu Mingkang Asked: Banks Cautiously Cooperate With Local Governments

"At present, the CBRC is most concerned about regulating and sorting out places.

In July 20th, the CBRC held the third economy.

The risk of local financing is still the focus of regulation.

"For the local financing platform that has standardized and cleaned up for more than a year, commercial banks lack knowledge of the potential risks of local financing platforms, and they are not strong enough to supervise contracts and make up collateral."

A local banking regulatory authority said.

In the early work conference of the CBRC, the new rules of loans for commercial banks to implement the "three methods and one guideline" were required.

"The regulators have asked for the commercial bank loans to be appointed during the year, and the proportion of the new regulation process will reach 80% after the loan. However, in the implementation process, the business operation has brought a lot of trouble, and also reduced the derivative deposits of commercial banks."

A commercial bank personage explained.

Insufficient collateral

Accountability

Every move of the local financing platform affects the nerves of the market.

In its report, the central bank released fuzzy local financing platform data. The audit report released by the Audit Commission showed that local debt reached 10 trillion and 700 billion at the end of 2010.

"As at the end of 6 2011, nearly 8900 nationwide managed by local financing platforms, with a loan balance of nearly 7 trillion yuan."

A person familiar with the matter pointed out to the China Times reporter.

Data show that at the end of 11 2010, the balance of local financing platform was 9 trillion and 100 billion.

Behind the balance data of the local financing platform, regulators pay more attention to the risks of local financing platform loans.

"In the rectification and clearance of loans for local financing platform, it is found that some overdue loans have been overdue for a long time, but some commercial banks have not reflected in the five level classification of loans. This also reflects that commercial banks do not know the potential risks of local financing platforms."

The above CBRC sources pointed out.

While paying attention to the risk of platform loans, we should pay more attention to the compliance of mortgages behind loans.

Since 2009, the local financing platform has increased rapidly, and local government financing platform has appeared the local government's illegal guarantee and invalid guarantee. There are also unsecured and illegal land mortgage projects.

At the meeting, Liu Mingkang, chairman of the CBRC, pointed out that we should firmly guard the two key points of the scientific compensation loan repayment contract and the supplementary legal and effective pledge against the pledge, so as to make the risk early exposure, early detection, measurable and early intervention with scientific mechanism.

The banking regulatory authority said that for some commercial banks can not quickly adjust the loan collateral of the platform, the regulatory authorities will be serious accountability.

At present, some financing platform companies which use parks, hospitals and schools as collateral, and creditor banks do not carry out non public assets replacement for these public assets, which have not met the requirements of regulators.

While regulators control and reduce old loans, new local financing platform loans are also controlled.

In the working conference, Liu Mingkang asked commercial banks to prohibit the use of credit funds to support new platforms which did not meet the requirements.

For regulators demanding that commercial banks not be able to extend their loans and repay new loans, the senior researcher of Construction Bank (601939), Zhao Qingming, questioned if the loans could not be extended and borrowed new and old, then they would go directly into the loss.

If we really enter the loss, according to the 10 trillion platform loan calculation, if this year's 10% expires, the banking sector will see an industrial loss this year.

In the quarterly briefing, Liu Mingkang pointed out that banks should carefully carry out strategic cooperation with local governments, strengthen the management of land mortgage loans, and effectively classify venture capital according to the cash flow coverage.

Liu Mingkang stressed that it is necessary to scientifically define the term and repayment method of loan contracts as an important measure to prevent and control risks. The medium and long term loans should be repaid two times a year, and profits should be kept in accordance with the original requirements.

At the same time, we should supervise the banking financial institutions to stick to the "red line" of the customer credit concentration degree, and demand that the standard beyond the standard should be firmly suppressed.

We should adhere to the cost symmetry, eliminate the "supervision and arbitrage motives of the shadow banking" business from the mechanism and source, guard against the risk pmission, promptly promote the supervision of the trust company's financing business, and pfer the bank credit cooperative business, strictly prohibit the "cooperation" outside the table, strictly prohibit the provision of disguised guarantee and standby credit support to the financial products, and further strengthen the supervision over the pfer of credit assets.

80% loans follow the new rules

In the quarterly analysis meeting of the China Banking Regulatory Commission and the annual working conference, the scientific management of loans and the implementation of the "three methods and guidelines" have become the new focus of the CBRC in the second half of the year.

During the meeting, Liu Mingkang, chairman of the China Banking Regulatory Commission, urged all banking financial institutions to proceed from top to bottom, from small to micro, and strictly responsible. Starting from the basic link of credit business, we carefully analyzed the existing problems and gaps, and paid more attention to the substantive rationality of the way of taking money, so as to ensure that credit funds were not misappropriated eventually.

"This year, the CBRC fully implemented the new loan regulations to prevent the misappropriation of credit funds, and required that commercial banks should pay more than 80% of their loans in accordance with the new loan regulations at any time during the year.

At the same time, the CBRC asked commercial banks to report the data quickly according to the new loan regulations.

The commercial bank said.

Commercial banks have pointed out that although regulators are pushing ahead with "three ways and guidelines", they have also added trouble to commercial banks in terms of business operations, and have implemented the principle of paying loans in accordance with the new rules of loans. Loans are directly paid to the borrowers by commercial banks in accordance with the needs of borrowers.

The new loan regulation reduces the flow of deposits in the market, thus reducing derivative deposits, and is not conducive to attracting commercial banks' deposits.

There are also various problems in the process of "three ways and guidelines" promoted by regulators.

The banking regulatory authorities pointed out that although the CBRC asked commercial banks to fully implement the new loan rules, and the proportion of the loans reached more than 80%, some commercial banks still had less than 80% of the way of payment.

At the same time, it was found in the inspection that some commercial banks could not ask the borrowers to provide loan use plans when they issued loans, and loans could not require borrowers to regularly report the payment of funds so that the loan was misappropriated.