1. Establish a complete internal control system for non-performing loans. Commercial banks should strictly follow the loan procedures in the process of managing bank credit, and conduct "5C" strict examination on loan applicants in the process of handling loan procedures. The "5C" here mainly includes the following five aspects: First, moral character, that is, character. Second, capacity, that is, capacity. Third, capital, which is capital. Fourth, guarantee, that is, collateral. Fifth, the operating conditions, that is, the operating conditions of enterprises. Once an abnormality is found, the bank should immediately terminate the loan.
2. Carry out relevant training to improve the overall quality of employees. In order to better prevent the occurrence of non-performing loans, China's commercial banks should not only establish a correct concept of development and achievements, but also train their employees in business level and professional ethics on the basis of "prudent operation", correct their risk outlook, improve their awareness of risk prevention, and make them reach the level of controllable credit risk.
3. Commercial banks should rely on the role of local governments to improve the control level of non-performing loans from the following aspects: First, guide local governments to create and introduce a set of punishment measures for non-performing loans to improve the efficiency of non-performing loans control and prevention. Second, cooperate with local governments to build a credit environment, create and improve relevant laws and regulations, and obtain the support of local governments in the fields of asset restructuring and transformation. Thirdly, it is suggested that local governments should create an intermediary service market for non-performing loans, provide evaluation and auction services for non-performing loan enterprises, and implement the administrative resources owned by the government.
4. Improve relevant laws and regulations on bank credit risk management. If a country has a complete legal prevention and control system for bank credit risks, it will have a solid backing for defending financial risks and maintaining financial security. Therefore, China should not only constantly improve the legal prevention and control mechanism of bank credit risk management, but also put it into practice, act according to law, strictly enforce the law, and seriously deal with financial crimes from the source.
5. Relevant institutions should give full play to their guiding role and establish a long-term supervision mechanism. The China Banking Regulatory Commission should supervise commercial banks, effectively supervise the internal control system of commercial banks, improve the ability of banks to find and control risks, and guide commercial banks to move in the right direction. In addition, the relevant government departments should also establish a long-term supervision mechanism to strictly examine all parts of commercial banks to help them minimize the risk of non-performing loans.