Research On Rural Banks Development In China

In our country, the agricultural economy not only affects the national economy but also affects the social stability. In those many factors that impact the agricultural economy, the rural finance is the most important one. At presents, the rural finance has the short supply problem. So the establishment of rural bank not only meets the demand of the rural finance but also improves the competition situation, and to promote the rapid development of rural economy. Compared with the other commercial bank the rural bank has many unique advantages such as flexible mechanisms, diversification, efficiency and so on. By the end of2012, there were876rural banks all around the country, and it largely decreased the amount the counties which did not have financial institutions before.There are many hidden trouble although the amount of rural bank has increased sharply. If the problems can’t be solved, they can hinder the development of the rural and impact the quality of the rural banks. We make an investigation of rural banks of HSBK, hope to understand the present management situation, the difficulties and experiences that other rural banks can learn. The aim of the article is to find the roots of the problems and try to take measures to solve the difficulties through the theoretical analysis and case analysis.Firstly the paper introduces the ideas of the domestic and foreign experts and scholars on the village banks issue. The second part introduces the characteristics of the development of village banks in China, including the concept and characteristics of village banks, and then from the aspect of the established background, the paper analyses the necessity and importance of village banks. Then the paper makes a comparison with the rural banks and general commercial banks, rural credit cooperatives, postal savings banks, then sums up the characteristics of rural banks.The third part focuses on analyzing the status and problems of the rural bank in the actual operation. Firstly, this part analyses the development status of rural banks from the aspects such as the growth in the number of rural banks, regional differences as well as the establishment and so on. Secondly this part introduces the problems existing in operation, The problems include the external environment and internal management control. On the side of the external environment, the first thing is the position, there is a contradiction between the goal and the commercial interests. The second is related measures are not sound. Payment and settlement systems, credit check system are not docked, there is also operational and institutional barriers for rural banks to entry. On the side of the internal management control, first, option is unreasonable; Second, internal governance deficiencies; Third, social recognition is not high; Fourth, greater credit risk; Fifth, lack of innovation; Sixth, the talent bottleneck.The fourth part of the paper is mainly for the healthy development of village banks makes a number of recommendations from the external environment and internal management aspects, specifically from the policy guidance, support mechanisms, corporate governance, and management. I believe under the government supports as well as rural banks own efforts, the development of rural banks will go to a higher level, and to contribute the rural economy.