Under the instruction of the CPC Central Committee and the State Council, the CBRC recently issued an urgent notice to all banking institutions requiring them to well tackle bad debts caused by the powerful earthquake according to relevant regulations and policies with a view to relieving the burden of the people in disaster areas and contributing to quake relief and reconstruction work.

According to the notice, all banking institutions should, in line with the Rules on the Administration of Bad Debts Write-off by Financial Enterprises (amended in 2008), recognize and promptly write off a debt or overdrafts on a bankcard where the borrower can¡¯t make repayments even with the compensation of insurance and guarantee due to huge losses caused by the earthquake, or the card holder and the guarantor are both dead or missing during this calamity, leaving no other properties to repay the overdrafts. Meanwhile, banking institutions may write off bad debts by referring to the certificates issued by the government, their own investigation reports or the legal opinions if no certificates issued by the court to prove debtors¡¯ inability of repayment. Bank branches should deliver timely write-off applications together with related documents to their upper-level offices for review and approval.

The notice also required banking institutions to figure out their total losses in this quake and set aside adequate provisions in a timely manner. Besides, banks are asked to keep well the documentation of the written off debts and continue to observe the confidentiality principle.

The CBRC local offices are required to earnestly guide and urge banks to conduct the write-off work in accordance with this notice and relevant policies, guard against possible fake write-offs and report the problems emerged in the work as soon as possible.

Source: CBRC