Legal analysis: 1. Banks should make provision for general reserves on a quarterly basis, and the balance of general reserves at the end of the year is not less than 65438+ 0% of the balance of loans at the end of the year.

2. The proportion of special reserve: 2% for loans of interest; For subprime loans, the provision ratio is 25%; For doubtful loans, the provision ratio is 50%; For loss loans, the provision rate is 100%. Among them, the loss reserve for subprime and doubtful loans can be floating by 20%.

3. Withdrawal ratio of special reserve: The bank shall determine the quarterly withdrawal ratio by itself according to the special risk status, risk loss probability and historical experience of different types of loans (such as countries and industries).

The provision for bad debts made by financial enterprises according to regulations can be deducted before enterprise income tax according to 1% of the final balance of bad debt provision. Financial enterprises that meet the conditions for writing off bad debts should first write off the bad debt reserves that have been deducted before tax, and the insufficient part of the write-off should be deducted before enterprise income tax. When a financial enterprise recovers the written-off bad debt losses, it should increase its taxable income accordingly. The provision for bad debts by domestic financial enterprises is not in line with international practice. In terms of bad debt provision, the international common practice is to require banks to make provision for bad debts according to the five-level classification of loans, and allow them to be charged before income tax.

Legal basis: Measures for the Administration of Loan Loss Reserves of Commercial Banks

Article 2 These Measures shall apply to commercial banks established in People's Republic of China (PRC), including Chinese-funded banks, wholly foreign-funded banks and Sino-foreign joint venture banks.

Article 3 The term "loan loss reserve" as mentioned in these Measures refers to the reserve drawn from the cost of commercial banks to resist loan risks, excluding the general risk reserve drawn from profit distribution.

Article 4 China Banking Regulatory Commission and its dispatched offices (hereinafter referred to as banking regulatory agencies) shall supervise and manage the loan loss provision of commercial banks in accordance with these Measures.

Article 5 The reserve for loan losses of commercial banks shall not be lower than the regulatory standards of banking regulatory agencies.