CHINA’S central bank is investigating the accuracy of nonperforming loans (NPLs) data at banks, people with direct knowledge of the matter said yesterday, underlining policymakers’ concerns about rising debt in the country.

    Specifically, the central bank’s financial stability bureau is investigating whether any NPLs have been miscategorized as normal loans or special mention loans, referring to debt at risk of default, according to two sources who saw a central bank notice on the issue.

    The probe comes as slowing economic growth raises regulatory concerns that banks are increasingly covering up their NPLs to dress up their balance sheets, said one of the sources.

    The People’s Bank of China is looking into whether banks’ asset quality is appropriately categorized and if there is interference from local governments in banks’ lending and refinancing decisions, another source said.

    The central bank is also checking to see if troubled assets have been secretly moved off balance sheet and if loan repayment schedules are reasonable, the source added.(SD-Agencies)