What is a Classified Loan?

The type of loan has the characteristics of efficiency, security, and liquidity, and refers to the specific organizational form of the loan. Loan types are specific classifications of loans according to certain criteria.

Loan type

The type of loan refers to the specific organizational form of the loan.

Dividing loan types from a macro perspective is helpful to analyze the proportional relationship between loans of different economic components, which facilitates the specific implementation of national economic policies, especially industrial policies, the rational allocation of social funds, and the guidance and promotion of coordinated development of the industrial structure. Dividing loan types from a micro perspective will help strengthen corporate management, enhance the ability to repay principal and interest, improve loan effectiveness, and reflect the three principles of loan effectiveness, security, and liquidity. The current classification standards and types of loans are as follows:

Divided by loan operating attributes

1. Self-operated loan. Refers to a loan issued by a lender with funds raised in a legal manner, the risk of which is borne by the lender, and the lender recovers the principal and interest.

2. Entrusted loans. Refers to loans provided by government agencies, enterprises, institutions and individuals, and loans are issued, supervised, and assisted by lenders (ie, trustees) based on the loan objects, uses, amounts, terms, and interest rates determined by the client. . The lender (trustee) only charges a handling fee and does not bear the risk of the loan.

3. Specific loans. Refers to a loan issued by a wholly state-owned commercial bank after approval by the State Council and taking corresponding remedial measures for possible losses caused by the loan.

By loan term

1.

Loan classification is an inherent requirement of the loan itself

The characteristics of the loan itself determine the classification of the loan. Loans have the following characteristics.

1. Loans are inherently risky. Intrinsic risk refers to the possibility of loss that has already existed in practice but has not yet been shown. In theory, as long as any loan is issued, the risk will occur, and different loans have different risks. Some loans have a common Risk; scientific classification of loans can help us better identify loan risks and strengthen loan management.

2. The complexity of loan pricing. Loan pricing refers to the price of loans with the loan interest rate as the main content; there are many factors that affect the price of loans, such as the relationship between loan supply and demand, the general level of interest rates on the lending market, the central bank's monetary policy, inter-bank competition, loan risks, and loans Pricing technology, etc., where loan risk is an intrinsic factor that determines the price of a loan. Scientific classification of loans can provide a basis for loan pricing.

3. Asymmetry of loan information. Due to the different sources of information, the borrower knows more about the market environment, financial situation and repayment willingness of the bank than the bank. The position of the bank cannot eliminate this information asymmetry. The classification of loans can reduce the information asymmetry. Harm.

Loan classification is needed for the stable operation of commercial banks

Commercial banks have inherent risks that arise during the operation of their asset-liability business. Loans are the main asset business of commercial banks. Establishing a scientific loan classification method is an important condition indispensable for identifying loan risks, strengthening loan risk management, and promoting the sound operation of banks.

Loan classification is a need for central bank financial supervision

To ensure the security of the financial industry, the central bank must implement effective supervision of commercial banks, including the management of loan quality, policies, procedures, management and control. From a macro perspective, loan quality and structure are important indicators for measuring a bank's management level. They are also the basis for the calculation of other assessment indicators and the scientific classification of loans, which is beneficial to the central bank's financial supervision.