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Chinese Commercial Banks Suffer Less Bad LoansSource: www.collectionindustry.com November 13, 2006 China's commercial banking sector is plagued by less bad loans, which were reported to be of 116.8 Billion Yuan by twelve joint stock commercial banks in the beginning of 2006. Non-performing credit ratio for key commercial banks in China slid to 7.6%, down by 1.3% points over the start of this year (2006). China Banking Regulatory Commission's statistics show that bad debt in state commercial banks came down by 16.4 Billion Yuan, to reach 1.1 Trillion Yuan, by the end of Sep 2006. Bad debt ratio for these banks reached 9.3%, which was down by 1.2% points over the start of this year. Towards the end of 2006, China will open up its financial sector, as per its commitment to WTO (World Trade Organization). Full entry of foreign banks will result in a great transformation in the outer environment of the commercial banks in China. However, they will only be able to survive if they enhance income from businesses, besides interest rate, and improve capability of enhanced performance and service to customers. Commercial banks need to try to change the loan and credit structure, effectively and efficiently control the over-fast increase of long and mid -term loans, and develop credit services that drive consumption. ˇ§The financial institutions in China have reported around 724 law-breaking cases so far, almost 190 fewer than the number in 2005. Financial institutions in Chinese banking sector ought to pay great attention to this type of cases, enhance corporate governance and establish long-term mechanisms to prevent risksˇ¨, said a RNCOS analyst who has recently researched a report on ˇ§China Banking Sector Analysis (2006-2009)ˇ¨. This research report on ˇ§China Banking Sector Analysis (2006-2009)ˇ¨, also addresses some interesting issues for today's Global business environment:
The report further provides extensive research and objective analysis on the growing banking industry, their product quality, and their services in India. This report helps clients to analyze the leading-edge opportunities critical to the success of the banking Industry in China.
New Breed of Chinese Debt Collectors Shun ViolenceSource: by Mike Bevel, www.CollectionIndustry.com, October 10, 2006 Back in 2000, China banned the registration of debt collection companies due to increased threats and actual acts of physical violence against debtors. The companies didn't disappear, and, with kinder and toned down practices in hand, they're turning profits.
"Our class tells people what techniques, manners and laws to apply to persuade a debtor to pay,ˇ¨ said an unnamed Chinese source who preferred to remain anonymous. ˇ§It is not about threatening the debtors with the law, but [educating] them to what they might face if they refuse."
Statistics show Shanghai has more than 100 debt collection agencies, which collect debts amounting to hundreds of million of yuan every year. A company formed by legal experts in China and the United States to collect debts on behalf of Chinese companies in the United States was launched at the start of this month. According to National Business Daily, many of the collection companies, which charge at least 10 per cent of the debt figure for services, are kept very busy. China moves to curb excessive credit, money growth Source: Reuters By Kevin Yao and Eadie Chen, July 21 2006 BEIJING, July 21 (Reuters) - China raised commercial banks' reserve requirements on Friday for the second time in five weeks in a bid to cool a racing economy that grew 11.3 percent in the second quarter from a year earlier. The tightening will suck out of the banking system some of the cash generated by China's record trade surpluses, which is feeding an investment boom that is adding to the imbalances plaguing the world's fourth-largest economy. "It's a very positive step. It directly tackles the problem of excess liquidity, which is the key risk to the economy at the moment. It should help to curb credit growth," said Ben Simpfendorder, an economist at Royal Bank of Scotland in Hong Kong. The People's Bank of China (PBOC) said it was increasing the proportion of deposits that big banks must hold in reserve, rather than lend out, by 0.5 percentage point to 8.5 percent, effective from Aug. 15. A similar move on June 16 required banks to tie up a further 150 billion yuan ($18.75 billion) at the PBOC. It said the latest tightening was aimed principally at strengthening liquidity management and curbing excessively rapid growth in money supply and credit. The overarching purpose, it added, was to maintain the sound momentum of the economy. Economists had widely expected further tightening after Tuesday's surprisingly strong gross domestic product figures Banks Stymied by Chinese Who Pay Credit Cards in Full
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