China 's central bank is investigating the release of NPLs data at the banks due to its concerns over the country 's financial system ; the probe will focus on whether the loans have been mis - categorised as normal loans or special mention loans . Analysts widely believe problems in China 's banking sector are far more severe than official data is suggesting , as some banks delay loan payments and use off - balance sheet lending to hide bad loans .
China's central bank is investigating the accuracy of NPLs data at the banks due to increasing concerns over the country's financial risks; the probe will focus on whether the NPLs have been mis-categorised as normal loans or special mention loans. Analysts widely believe NPLs in China's banking sector are far more severe than official data is suggesting, as some banks delay loan recognition and use off-balance sheet lending to hide bad loans.