The CBRC Issued the Guidelines on the Management of Collaterals for Commercial Banks

 

 

Recently, the CBRC issued the Guidelines on the Management of Collaterals for Commercial Banks (hereinafter referred to as the "Guidelines") to guide commercial banks in standardizing collaterals management, effectively preventing and mitigating credit risks and providing effective financial service to serve the real economy .

 

The collateral management of commercial banks is an important part of the comprehensive risk management system. The development of the Guidelines will guide commercial banks to strengthen the development of collateral-related systems, clarify responsibilities, improve information systems and standardize collateral management business processes. At the same time, the Guidelines put forward specific requirement on the collateral classification, valuation, concentration management, and stress testing, which is beneficial for commercial banks to strengthen collateral risk management.

 

The Guidelines comprises seven chapters and 48 articles, and it emphasizes that commercial banks should follow the principle of law compliance, validity, prudence and subordination, refine the organizational structure of collateral management, strengthen the classification of collaterals, valuation of collaterals, setting of pledge ratio and other key aspects of the risk management, and standardize collateral survey and assessment, setting of pledge, maturity management, return of collaterals, and other business procedures.

 

The implementation of the Guidelines is conducive to promoting the risk mitigation effect of collaterals and managing residual risks of collateral transaction. It will also guide commercial banks to balance the relationship between collateral loans and credit loans and promote the quality of financial service for the real economy.

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Copyright: China Banking Regulatory Commission
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