Spark Global Limited Reports:
The increasing rate of bad debts in banks reduces the ability of banks to respond to risks and harms the sound operation of China’s financial system. Moreover, the non-performing assets formed by bank bad debts are the largest financial non-performing assets. Properly disposing of non-performing banking assets can not only give play to the residual value of non-performing financial assets, but also improve the operating environment of China’s financial system. The disposal of non-performing financial assets is inseparable from the support of laws and regulations. At present, China’s relevant laws on the disposal of non-performing financial assets have some problems in applicability, statute of limitations, transfer of claims, notification methods, litigation jurisdiction, etc., which have seriously affected China’s finances. The efficiency of disposal of non-performing assets.
1. Introduction to the causes and disposal methods of non-performing financial assets
(1) Causes of non-performing financial assets
Due to the special status of China’s commercial banks, their business methods and business philosophy are different from those of ordinary enterprises. In the traditional planned economy system, the state-owned nature of banks makes their business philosophy rigid. There is no concept of independent operation and self-financing, leading to banks Difficulty in transition after restructuring. Secondly, the bank’s loan business evaluation system is not perfect, the evaluation work is not deep enough, the loan management system is not sound enough, and the lack of a risk early warning mechanism has all led to the generation of financial non-performing assets.
(2) Disposal of non-performing financial assets
Regarding the disposal of bank financial non-performing assets, China has a complete set of disposal methods, which mainly include the following methods: direct collection, using appropriate means within the effective statute of limitations for collection work; negotiated disposal, through agreement mediation between the debtor and the creditor , Using mortgages, pledges and auctions to solve the problem of financial non-performing assets; borrowing new debts to repay old debts, by converting non-performing financial assets into new debts, deferring the repayment of the principal and re-borrowing to repay old debts to eliminate financial non-performing assets or Change the form of financial non-performing assets.
2. Legal issues concerning the disposal of non-performing financial assets
(1) Issues concerning the application of laws and regulations
Regarding the disposal of non-performing financial assets, China has multiple levels of laws and regulations, such as the “Commercial Bank Law”, “Regulations on Financial Asset Management Companies”, and the notice issued by the Ministry of Finance on the issue of the “Guiding Opinions on Liquidation of Non-performing Assets of State-owned Enterprises” Etc.,
(2) Legal issues concerning the ownership of litigation rights
According to the “Civil Procedure Law of the People’s Republic of China”, the jurisdiction over litigation issues related to financial non-performing assets should be strictly in accordance with the law, that is, the right of litigation should be vested in accordance with the location of the bank where the actual debt belongs and the actual location of the debt company.