Research On Government Supervision Of Bank Loan Usage

Bank loan business is critical to social life and various industries.It helps to improve production capacity and efficiency and maintains stable development of a society.By using banking loan,companies and normal people can solve the problem of temporary fund shortage,meet the needs of daily production and operation,improve the quality of life and realize their long term development goals.China government systematically guide what fields could be invested and financed and these fields are generally divided into 4 kinds: strong encouragement,encouragement,discouragement and prohibition.China financial regulatory authorities seamlessly follow national macro policies to control the flow of bank loan proceeds and adopt detailed classification management on the purpose of loan funds.So it is so important that the actual loan proceeds could strictly flow to the encouragement area that national macro policies require.China’s financial regulators have been working very hard to improve their management level and management ability.Especially in the past 10 years,the management of banking loan has upgraded from rough to sound,from simple to end to end management.All commercial banks across the country have carried out comprehensive and thorough rectification of internal processes and control measures in accordance with regulatory requirements,and achieved positive and remarkable results.Nevertheless,in reality,some banking loan proceeds flow to noncompliance or even illegal area,moreover,some illegal cases always involve huge amount and a group of people,resulting in heavy losses of state-owned funds and negative social impact.On the other hand,most of the commercial banks adopt very strict loan documentation review criterion that has caused heavy operational burden on enterprises.Therefore,effectively prevent the risk of illegal flow of loan proceeds and meanwhile enhance the government supervision management level on banking loan flow is urgent to be addressed.This research takes Shanghai as an example.Shanghai is building up its financial center position in Asia and world,it has large number of global multinational enterprises,state-owned enterprises,Hong Kong,Macao and Taiwan enterprises,unicorn enterprises,independent research companies and high-tech pilot enterprises;Shanghai has the first batch of free trade pilot zones in China.It always being the first place to test and enjoy pilot policies.In a nutshell,Shanghai undoubtedly has unique advantages in policy testing.So,taking Shanghai based banks as an example will have a very practicable reference for the whole country.The successful experience of Shanghai can also be a good example that could be used and copied for other provinces and cities in China.This thesis introduces the harmfulness caused by the illegal flow of loan proceeds,the necessity of government supervision and the current government administrative supervision measures.The thesis also looks into the evolution of government supervision laws and regulations,deeply analyzes the existing problems and causes of current government supervision,and come up with government supervision suggestions on the flow of loan proceeds,so as to provide guidance for government managers on supervision strategy,policy review,supervision resource allocation.Overall,this thesis helps to bring up with practicable supervision strategy,policy suggestion,best practice solutions to government.