State-owned Commercial Banks' Internal Control Status And Countermeasures

Internal control is a process and mechanism designed to supervising, controling and correcting risk by establishing a series of rules ,procdure and methods,in order to achieve commerical bank's operational goal. Effective internal control is essential to upgrading bank's competition and assuring bank system's stable operation.After tens of years development, the basic organizational structure has set up in our four state-owned commercial banks compliance with modern commercial bank's internal control principle. However, there are some deficiencies compared with the New Basel Capital Accord and risk management regulated by the People's Bank of China. It includes the following aspects: massive bad loans, high venture capital ratio, many bank errors, incomplete risk control system and low operation.The writer analyse the cause of shortcoming of state-owned commercial banks' internal control on property ,bank organizational structure and regulations,etc. The countermeasures are presented in the report on the following aspects: completing corporate governance, reforming shareholding and human resource stimulus and restraining system , streamlining organization and improving internal control, the targets of which are enhancing the internal control of state-owned commercial banks and strengthening their ability of risk confronting and competition.