The main profit source of commercial banks is credit loans, because banks face many risks in this financial activity, such as profit risk, credit risk, liquidity risk and so on. Therefore, from 65438 to 0995, the People's Bank of China promulgated the Law on Commercial Banks. The loan activities of commercial banks are instructive and binding.
Loan process
Loan procedures:
1, loan application. Borrowers apply for loans from local banks. In addition to applying for small loans in rural areas, relevant information is required when applying for other types of loans. (1) Basic information of the borrower and guarantor; The financial report of the previous year approved by the financial department or accounting (auditing) firm, and the financial report of the previous period of applying for a loan; (3) Rectification of original unreasonable loans; (4) List of mortgaged property and pledged property, proof that the person who has the right to dispose of it agrees to mortgage and pledge, and relevant proof that the guarantor agrees to guarantee intention; 5] Project proposal and feasibility report; (6) Other relevant information deemed necessary by the Bank.
2. Credit rating evaluation. The bank evaluates the borrower's credit rating.
3. Loan survey. Banks investigate the legitimacy, safety and profitability of borrowers.
4. Loan approval. Banks should examine and approve loans in accordance with the loan management system of separation of examination and loan and grading examination and approval.
5. sign a contract. The bank signs a loan contract with the borrower.
6. Loan issuance. The bank issues loans on schedule according to the loan contract.
7. Post-loan inspection. The bank conducts follow-up investigation and inspection on the borrower's performance of the loan contract and operation.
8. Loan repayment. When the loan expires, the borrower shall repay the loan principal and interest in full and on time. If extension is needed, an application for extension should be submitted to the bank before the loan expires, and the bank will decide whether to extend it.
Inspection and recovery
After the loan is issued, in order to ensure that the loan can be recovered on time, the bank will organize inspectors to investigate the lender's operating conditions and financial conditions regularly or irregularly, pay attention to the use of funds and prevent moral hazard. If the lender fails to repay the principal and interest on time, the bank has the right to take sanctions or recover the principal and interest through legal means to maintain the security of credit funds.