July 2, 2022
  • July 2, 2022

Central bank sends high-risk warnings to rural lenders

By on April 24, 2021 0

What’s up: China’s central bank issued high-risk warnings to rural financial institutions in its latest assessment of the banking system, even as the sector generally showed improvement.

The People’s Bank of China (PBOC) listed 285 rural commercial banks, cooperative banks and credit unions as high risk after assessing the risk exposure of 4,399 banking institutions nationwide in the fourth quarter of 2020.

According to the PBOC, 127 other small village banks were also classified as “ high risk ”.

The context: The 442 banking institutions listed as high risk in the latest assessment, including 30 commercial banks in the city, are 132 down from the previous quarter and 103 down from the same period last year. Institutional assets represent 2% of the industry total.

The PBOC classified banks into 11 levels based on risk exposure criteria. Those rated above level eight are considered very risky.

The risk assessment affects, among other things, the access of institutions to preferential central bank credit aid, bond issuance requirements and the surrender of allowances.

Quick Takes are condensed versions of stories related to China for quick news that you can use. To read the full story in Chinese, Click here.

Related: A Series of Corruption Runs Through The Province’s Rural Financial System, Says Graft Busters

Contact reporter Han Wei ([email protected]) and editor Bob Simison ([email protected])

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