Administrative measures for the commercial bank loan loss reserves

    (July 27, 2011 China's Banking Regulatory Commission promulgated as of January 1, 2012, 2011 4th) Chapter I General provisions

    First to strengthen prudential supervision, improve commercial banks ' loan loss reserve's dynamic and forward-looking, enhanced ability of risk prevention, promoting commercial bank operation, in accordance with the People's Republic of China Banking Regulatory Act and the People's Republic of China commercial bank law, these measures are formulated.

    Second approach applies to People's Republic of China territory legally established commercial banks, including banks, foreign-funded banks and Sino-foreign joint venture banks.

    Article III provisions for loan losses in these measures refers to the commercial bank at the cost of expenses, reserves against loans risk, are not included in the profit distribution into the General risk.

    Fourth, China Banking Regulatory Commission and its agencies (hereinafter referred to as the banking regulator) in accordance with the measures to supervise commercial banks for loan losses.

    Fifth commercial bank loan loss reserve shall not be lower than the regulatory standards set by banking regulators.

    Chapter II regulatory standards

    Sixth banking regulators in setting loan loss provision ratio and provisioning coverage ratio index loan loss reserve adequacy.

    Loan loss provision ratio to ratio of provisions for loan losses and the amount of outstanding loans; set aside for loan loss coverage ratio of bad loans. Seventh basic standards for loan loss provision ratio 2.5%, basic standard provisioning coverage ratio is 150%.

    The higher of the two criteria in the regulatory standards for loan loss reserves.

    Eighth banking regulators according to the economic cycle, macroeconomic policies, industrial policies, commercial bank loans and deviation, loan loss trend factors such as commercial bank loan loss reserves regulatory standards for dynamic adjustment.

    Nineth banking regulators according to business characteristics, quality, credit risk management, loan classification deviation, bad debts written off on home loan loss reserves regulatory standards for commercial banks should achieve differentiation adjustment.

    Tenth commercial banks should, in accordance with the relevant provisions of the banking regulatory capital adequacy ratio management determines provisions for loan losses of capital property.

    Chapter III management requirements

    11th commercial bank loan loss reserves established by the Board of management management system and its major changes for approval, and loan loss reserve management is ultimately responsible.

    12th commercial bank management is responsible for establishing a complete identification, measurement, monitoring and reporting of credit risk management system to carefully assess credit risk, ensure that provisions for loan losses to cover loan risks fully.

    13th commercial bank loan loss reserve management system should include the following:

    (A) the loan-loss provisioning policies, procedures, practices and models;

    (B) the Division of responsibilities, business process and monitoring mechanisms;

    (C), bad debts written off and provision for loan losses, as well as the statistical information system;

    (D) the disclosure requirements;

    (E) other management systems.

    14th loans of commercial banks should establish a sound system of risk management, risk identification, measurement and data information for loan loss reserve management to provide effective support.

    15th commercial banks for loan loss reserve system should be regularly checked and evaluated promptly improve relevant management system.

    16th commercial banks should, in semiannual, annual financial disclosure provisions for loan loss-related information in the reports, including, but not limited to:

    (A) period and the loan loss provision ratio and provisioning coverage ratio from a year earlier;

    (B) period and the balance of provisions for loan losses in the same period last year;

    (C) aside, back to write off amount for the current period.

    The fourth chapter regulations

    17th banking regulators periodically assess banks loan loss provision system and scientific management system, completeness, validity and operability, and will assess the feedback on board and management.

    18th commercial banks should on a monthly basis to the banking regulatory agencies provide information on the provisions for loan losses, including but not limited to:

    (A) of the beginning and ending balance for loan losses;

    (B) aside, back to write off amount for the current period;

    (C) the loan loss provision ratio and provisioning coverage ratio during the beginning and ending values.

    19th banking regulators and external auditors on a regular basis to exchange information and master external audit institutions of commercial banks ' loan loss reserve adjustment and the associated comments.

    20th banking regulators should set up the commercial bank loan loss data analysis system, tracking, statistics and analysis on loan loss data, set and dynamic adjustment for scientific data support supervisory standards for loan losses.

    21st banking regulators by month commercial bank loan loss provision ratio and provision coverage monitoring and analysis to investigate the anomalous change of provisions for loan losses, or on-site inspection.

    22nd banking regulators should be banks ' loan loss reserve system construction and implementation as important elements of risk management.

    23rd commercial bank loan loss reserves for three consecutive months below the regulatory standards, banking regulators issued a risk to commercial banks, and the car; six consecutive months below the regulatory standards, banking regulators under the People's Republic of China banking regulatory provisions of the law, take the appropriate measures.

    24th banking regulators check found that commercial banks to meet regulatory standards by means of fraud, order the rectification, and in accordance with the People's Republic of China Banking Regulatory Act provides for administrative penalties.

    The fifth chapter by-laws

    25th article outside the commercial banking institutions in the light of the implementation of this approach. Article 26th bank regulators identify systemically important banks should be standard before the end of 2013.

    Non-systemically important banks should be standard before the end of 2016, by 2016 the nonconformance shall formulate compliance planning, and reporting to the banking regulator, no later than the end of 2018 target.

    27th article this way is responsible for the interpretation of the China Banking Regulatory Commission. 28th article of the rules implemented on January 1, 2012.