The policy for non-performing loan transfer was loosened to allow to permit lenders to sell unprofitable debts that are formerly bundled by 10’s which is now by 3’s. This is the most recent action of the China Banking Regulatory Commission (CBRC) to help alleviate the problem of a huge pile of debt because of sluggish economic growth. The idea is the smaller number of the bundle would allow banks to get rid of bad debt at a faster rate. Margins have been narrowed down following concurrent reduction in interest rates as a mountain of bad debt increases that slowed down the economic growth rate of the country over the past 25 years.
