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