Repaying principal and interest with interest is a special agreement in the monetary lending relationship, that is, the borrower pays off the loan cost and interest in one lump sum on the loan maturity date.
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A few days ago, the regulatory authorities put forward clear requirements for the banking industry and earnestly implemented the installment repayment of local financing platform loans. In principle, the principal should be repaid at least twice a year, or even once a quarter, and the proceeds should be paid off with the principal. The modification of unscientific clauses such as "one-time loan and one-time repayment" in the original loan contract has also been carried out in the banking industry, and the regulatory authorities require the completed projects to be included in the repayment period immediately.
Regulators have previously reminded the banking industry that most loans from local financing platforms are medium-and long-term loans for more than five years, and the risk exposure is lagging behind. The risk will be concentrated in the next three to five years, so be prepared.
Previously, according to the bank's self-inspection statistics, as of the end of June, the financing platform loan was 7.66 trillion yuan. Among the three types of loans, 50% are loans with insufficient first repayment source and have to rely on the second repayment source to cover the principal and interest; 26% of the loan projects have non-compliant borrowers, non-compliant financial guarantees or serious repayment risks during this period. Only 24% of the loans can rely on the cash flow of the project to repay the principal and interest.
Among them, the platform projects with non-compliant borrowers and lack of full mortgage and pledge guarantee are likely to cause problems such as unilaterally changing the original creditor-debtor relationship and evading debts, which has become the key monitoring object of the regulatory authorities.
In this regard, the regulatory authorities have always stressed that for loans with insufficient legitimacy of the borrower, while continuing the original borrower's repayment responsibility, new repayment entities should be added in time to ensure that the borrower is linked to the project contractor and the project cash flow owner.
When deploying the work in the fourth quarter, the supervisory layer further emphasizes the continuous dynamic calculation of the cash flow of the project and takes countermeasures in advance. After the platform loan expires, it shall not be extended or reorganized at will. It is necessary to strictly classify various forms of platform loans and make provisions.