Ministry of Finance, Measures for the Administration of Allocations by Financial Enterprises to Their Reserves

财政部金融企业准备金计提管理办法

Percentage of allocations to general reserves of financial enterprises raised to 1.5%.

Clp Reference: 3610/12.03.30 Promulgated: 2012-03-30 Effective: 2012-07-01

Issued: March 30 2012

 

Effective: July 1 2012

Applicability: These Measures shall govern enterprises that engage in financial business, such as policy banks, commercial banks, trust and investment corporations, finance companies, lease financing companies, financial asset management companies, rural banks and urban and rural credit cooperatives, that have lawfully been established in the People's Republic of China with the approval of the China Banking Regulatory Commission (Financial Enterprises) (Article 2).

Main contents: In principle, the balance of the general reserve may not be less than 1.5% (previously 1%) of the period-end balance of risk assets (Article 6).

Estimated value of potential risks has also been revised:

Estimated value of potential risks = regular risk assets × 1.5% + special mention risk assets × 3% + substandard risk assets × 30% (previously 25%) + doubtful risk assets × 60% (previously 50%) + loss risk assets × 100% (Article 10).

Repealed legislation: Measures for the Administration of Allocations by Financial Enterprises to Bad Debt Reserves, 2005

clp reference:3610/12.03.30promulgated:2012-03-30effective:2012-07-01

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