First of all, bad loans should be set aside for bad debts, which will affect the profits of banks. Secondly, non-performing loans will occupy the bank's loan quota. In the tense era of loan-to-deposit ratio, many good projects may not be loaned. Finally, because banks are highly indebted industries, the high rate of non-performing loans may even lead to bank bankruptcy. Of course, due to the restrictions of Basel III and loan-to-deposit ratio, even if the bank goes bankrupt at present, it will not be caused by loans, but definitely by inter-bank business.