Credit Rating System Improves Financial Assets Quality in Shanghai

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Last updated at: (Beijing Time) Monday, March 10, 2003

Credit Rating System Improves Financial Assets Quality in Shanghai

Shanghai, China's financial hub, has successfully improved the quality of its financial assets through operation of a credit rating system.

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Shanghai, China's financial hub, has successfully improved the quality of its financial assets through operation of a credit rating system.

Thanks to the credit registration and consulting system, the average non-performing loan ratio was lowered to 6.8 percent at the end of 2002 for Chinese banks in Shanghai, the lowest among all Chinese banks in the country, according to sources with the People's Bank of China Shanghai Branch.

The system started up in 1998 and began a nationwide networkingat the end of last year.

As a pilot city, Shanghai has linked with 26 provinces and cities across China, according to officials with the Shanghai Branch of the country's central bank.

So far, the system has recorded the basic information and related credit data of more than 60,000 Shanghai borrowers, involving over 750 billion yuan (90.36 billion US dollars) in outstanding RMB loans, or more than 90 percent of the total corporate loans outstanding in Shanghai.

Meanwhile, the system has also gradually registered related data from financial institutions outside the city about credit extensions for enterprises in Shanghai.

By the end of January, loan information for 224 financial institutions from 14 provinces across China had been recorded in the system, involving more than 9 billion yuan (1.08 billion US dollars) in outstanding loans.

The banking credit registration and consulting system has become the infrastructure of the credit evaluation business in Shanghai.

On the basis of the system, Shanghai's financial institutions may not only consult credit data inside and outside the city, but also request information and credit worthiness reports on corporate borrowers outside the city, the central bank officials said.

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