What is the five-level classification of loans?

five tier classification of loans

1, Normal: Normal means that the borrower has been able to repay the principal and interest normally after applying for the loan, and the bank is fully confident that the borrower can repay the loan on time, and the loan loss rate is zero; The borrower can perform the contract, and there is no sufficient reason to suspect that the loan principal and interest cannot be repaid in full and on time.

2. Concern: Concern means that the borrower has the ability to repay the principal and interest, but some factors may interfere with the repayment of the loan, and the bank judges that the loss rate of the loan is 5%; Although the borrower has the ability to repay the loan principal and interest, there are some factors that may adversely affect the repayment.

3. Subgrade: Subgrade means that the borrower has obvious problems in repayment ability, and can't repay the loan by relying on his income, so he needs to pay off the loan by mortgage or financing. The loan loss rate is between 30% and 50%; There are obvious problems in the borrower's repayment ability, and it is impossible to repay the loan principal and interest in full by relying entirely on its normal operating income. Even if the guarantee is implemented, it may cause certain losses.

4. Suspicious: Suspicious means that the borrower has been unable to repay the loan, even if it is repaid by mortgage or guarantee, it will cause certain losses. The loss rate of loans is between 50% and 75%; The borrower can't repay the loan principal and interest in full, even if the guarantee is implemented, it will definitely cause great losses.

5. Loss: Loss means that the borrower cannot repay the loan in any way. The loan loss rate has reached 75% to 100%. After taking all possible measures or all necessary legal procedures, the principal and interest can still not be recovered, or only a very small part can be recovered.

The five-level classification of loans means that the People's Bank of China requires commercial banks to classify the loan quality in five levels according to the borrower's actual repayment ability, and classify loans into normal loans, concern loans, subprime loans, doubtful loans and loss loans according to the degree of risk.

It should be noted that the later the five-level classification of loans proves that the borrower's credit status is worse, the repayment ability and willingness are lower, and the loan interest rate may be higher, especially the latter three are non-performing loans. Once the bank successfully lends money, it is very likely to lose the principal and interest.

five tier classification of loans

The five-level classification of loans refers to the five-level classification of loan quality by commercial banks according to the actual repayment ability of borrowers. That is, according to the degree of risk, loans are divided into five categories: normal, concerned, secondary, suspicious and loss, and the latter three categories are non-performing loans.

There are a thousand hamlets in a thousand people. In any case, there are no two identical leaves in the world. Everyone has different views and opinions, and everyone will have different criteria for judging the same thing. My answer may not be the most standard and correct, but I also hope to give you some help and get your approval. Thank you!

Colleagues wish you a safe and smooth life in the future. When you encounter difficulties, you can also face them and succeed. If you have any questions you don't understand, you can keep asking. Don't feel embarrassed or worried. We have always been the backstage of your most loyal friend. In reality, you can talk to me in detail about illegal infringement and dissatisfaction. We always provide the most reliable judicial answers and help, and don't encounter difficulties.

What is the five-level classification standard of loans?

Five kinds of loans are defined as:

Normal: The borrower can perform the contract, and there is no sufficient reason to suspect that the loan principal and interest cannot be repaid in full and on time.

Note: Although the borrower has the ability to repay the loan principal and interest at present, there are some factors that may adversely affect the repayment.

Secondary: The borrower's repayment ability has obvious problems, and it is unable to repay the loan principal and interest in full by relying entirely on its normal operating income. Even if the guarantee is implemented, it may cause certain losses.

Suspicious: the borrower can't repay the loan principal and interest in full, even if the guarantee is implemented, it will definitely cause great losses.

Loss: After taking all possible measures or all necessary legal procedures, the principal and interest can still not be recovered, or only a very small part can be recovered.

Extended data:

Early loan classification

Before 1998, the loan classification method of China commercial banks basically followed the provisions of the Financial System of Financial and Insurance Enterprises promulgated by the Ministry of Finance in 1993, and classified loans into four types: normal, overdue, sluggish and bad debts. The latter three types are collectively referred to as non-performing loans, which are referred to as "one excess and two retention" in China.

Overdue loans refer to overdue loans, which are overdue as long as they exceed one day; A sluggish loan refers to a loan that is overdue for two years or less, but its business has stopped and the project has been dismounted; Bad debts refer to loans that cannot be recovered and need to be written off according to the relevant regulations of the Ministry of Finance. Most of the non-performing loans of China commercial banks have formed a historical problem that should be written off but not written off.

This classification method is simple and feasible, and it really played an important role under the enterprise system and financial system at that time. However, with the gradual deepening of economic reform, the disadvantages of this method have gradually emerged, which can no longer meet the needs of economic development and financial reform.

For example, an unexpired loan, regardless of whether there is a problem in fact, is regarded as normal, and the standard is obviously unknown. For another example, it seems too strict to classify loans overdue for one day as non-performing loans. In addition, this method is an after-the-fact management method, and it will only be shown as a non-performing loan in the bank account after the loan period is exceeded.

Therefore, it is very important to improve the quality of bank loans. It is often powerless to take some protective measures against the problem loans in advance. Therefore, with the outstanding problem of non-performing loans, this classification method has reached the point where it must be changed.

What does the five-level classification of loans mean?

The five-level classification of loans refers to the five-level classification of loan quality by commercial banks according to the actual repayment ability of borrowers. That is, according to the degree of risk, loans are divided into five categories: normal, concerned, secondary, suspicious and loss, and the latter three categories are non-performing loans.

1, normal loan

The borrower can perform the contract and always repay the principal and interest normally. There are no negative factors that affect the timely and full repayment of loan principal and interest. The bank is fully confident that the borrower can repay the loan principal and interest in full and on time. The probability of loan loss is 0.

2. Pay attention to loans

Although the borrower has the ability to repay the loan principal and interest, there are some factors that may adversely affect the repayment. If these factors persist, the borrower's repayment ability will be affected and the probability of loan loss will not exceed 5%.

3. Subprime loans

There are obvious problems in the borrower's repayment ability, and it is impossible to repay the loan principal and interest in full by relying entirely on its normal operating income. Interest needs to be repaid through asset disposal, external financing and even mortgage guarantee. The probability of loan loss is 30%-50%.

4. Suspicious loans

The borrower can't repay the loan principal and interest in full, even if the mortgage or guarantee is implemented, it will definitely cause some losses, but the amount of losses is still uncertain because of the borrower's reorganization, merger, mortgage disposal and pending litigation, and the probability of loan losses is between 50% and 75%.

5. Loss loans

Refers to the possibility that the borrower has repaid the principal and interest for free. No matter what measures and procedures are taken, the loan is bound to be lost, or although a very small part can be recovered, its value is negligible.

From the bank's point of view, it is meaningless and necessary to keep it as a bank asset in the accounts. Such loans should be written off immediately after the necessary legal procedures are performed, and the probability of loan loss is 75%- 100%.

Extended data:

Loan risk avoidance:

1, we must strictly review the market access mechanism and review the qualifications of some private lending institutions. Private banks with certain funds that can operate according to law can be exclusively owned by private financial institutions within a certain period of time; On the other hand, those who seek usury must be severely cracked down and banned to maintain a good financial order.

2. Interest rate management of private lending should be more transparent. To standardize this kind of private lending, we should fully consider the lending demand and incorporate it into our effective management methods, which can fluctuate according to the requirements of the lender's qualification level and use some market competition to promote the development of lending norms.

3. Introducing loans into the real economy, people have a lot of capital, so where do they need to go? But we also need to enter the cycle of the real industry, so as to promote the sustainable development of the real economy. Instead of just wandering around as some free capital, it is best to use it legally and normatively.

4. The flow of private lending funds needs to be strengthened and effectively managed. It is necessary to set up some special supervision institutions to supervise their lending behavior, monitor and manage funds, establish perfect, sound and scientific import statistical monitoring indicators, and conduct necessary supervision and guidance on the flow and investment of some private lending funds to prevent some private mortgage loans from being everywhere.

5. Many intermediaries or "employers" of private equity funds are fake, and these fake intermediaries usually make customers spend a lot of designated items to defraud them, including the cost of issuing evaluation reports and due diligence lawyer fees. If the above documents and legal acts are needed, the entrusting party must issue them by itself.