Virtually all Chinese banks already set aside more money than the required minimum to compensate for bad loans. Photo: Reuters

China intends to boost bank dividends with proposed cap on bad loan provisions, but will this backfire?

  • China’s Finance Ministry has proposed a new rule that would cap the amount banks have to set aside for bad loans
  • Loan loss provisions should not exceed twice of the minimum regulatory level with any excess funds released as profits
Topic |   China economy

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Virtually all Chinese banks already set aside more money than the required minimum to compensate for bad loans. Photo: Reuters
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Zhou Xin

Zhou Xin

Zhou Xin co-leads the political economy team at the Post. He mainly covers economic stories but also writes about Chinese politics and diplomacy. He has previously worked for Reuters and Bloomberg in Beijing.