Analysis Of The Development Of Private Banks In Zhejiang Province

In China, private-owned economy is developing rapidly, contributing a lot to thedevelopment of China’s economy. And it becomes a huge driving force of economicdevelopment. However, many private enterprises, especially small and medium-sizedenterprises, can hardly borrow a loan from the state-owned commercial Banks. Theyalso hardly have access to get financial support which causes many problems for themanagement. Simultaneously, as deepening privatization develops in lots of industryfields, the privatization of the financial sector, especially of the banks, has lagged farbehind. The proportion of private banks is slight which makes financial allocationefficiency low. Many small and medium-sized enterprises have financing difficultproblems in our country while there are plenty of domestic household savings withlimited investment choices. This contributes to the prevalence of private lending.However, unlike private-owned banks, which get discrimination in the private capitaland have trouble to get into the banking industry, foreign banks do enjoy variouspreferential policies in our country and show a good momentum of development. Thatleads to our concerns about the safety of domestic finance. These contradictions showthe urgency of developing and expanding private banks of our country. Based onChina’s most prominent private banks in Zhejiang province, this article concentrateson Taizhou Bank and Zhejiang Tyrone Commercial Bank, which are the mostoutstanding private-owned banks in Zhejiang, to give suggestion for the developmentof the private-owned banks in Zhejiang province and in other parts of China.In this paper, we start from the definition of private Banks. We think that theprivate bank is a kind of joint-stock commercial banks which is controlled by privatecapital, engaged in the market mechanism operation, at their own risks by theshareholders, and responsible for their own profits or losses. And we also analyze theadvantage of the development of private banks.Analyzed in Taizhou Bank and Zhejiang Tyrone commercial Bank which presentoperating conditions and operating characteristics of private-owned banks in Zhejiang,we summarized the points of how the private banks achieve outstanding performanceand these precious experiences will provide good suggestion for other parts of theprivate banks. This article also shows some problems of the two private banks, such asassets on a smaller scale, excessive concentrated loans, and the narrow business scope, etc. and these problems have certain suggestion for the development of other privatebanks.At the last, with the study of the issues for the private banks in Zhejiang Province,We propose the corresponding countermeasures and suggestions, Including:Expandingcapital replenishment mode,Improving risk control mechanisms,Vigorously developthe intermediary business,Be cautious about the rapid expansion, Improving personneltraining mechanism and improving the external environment for the development ofprivate banks.