The Research On Credit Risk Management Of Rural Banks

As the financial reform of china deepening in 1990 s,the four state-owned commercial banks have gradually withdraw capital from counties which has led to the flow of capital to cities and the lack of financial services of countries.Based on the background,Rural banks are thus set up.Rural bank is an important financial innovation in China's rural financial market.It combines the operation mode and characteristics of banks and micro credit companies,at the same time,it combines the business objectives of commercial banks and policy banks.The establishment of the village bank aims to solve the problem of "low coverage of the network,insufficient financial supply and insufficient competition" in rural areas.In recent years,with the support of the government,the rural banks have played an important role in improving the supply and demand structure of the rural financial market,alleviating the rural financial repression and promoting the development of rural economy.However,with the continuous expansion of the scale of rural banks,the problems brought about by it are gradually increasing.for instance,influenced by the profit maximization of the bank,The development of rural banks is inevitably deviated from the policy objectives of supporting rural economic development,the market access,operation and exit of rural banks are also not strictly regulated by the relevant laws.The loan business is the main business of the village bank,village bank loans mainly for farmers and small businesses.Agricultural production is affected by natural conditions and market environment and the peasant household loan has the characteristics such as the dispersion and the loan amount is small,and rural banks can not cross regional operations,which led to a high degree of credit risk of rural banks,the risk of homogeneity is serious.At the same time,the access of rural banks is small,and the registered capital is low,its ability to resist risk is poor.how to control the high credit risk faced by the rural bank loan business has become an important proposition for the sustainable development of rural banks.With the case of BOC Fullerton Community Bank,This paper uses the game theory to analyze the subjective credit risk faced by the village bank and put forward the policy suggestion for the game result,then the characteristics of BOC Fullerton rural bank credit risk and the existing problems are discussed,through the analysis of the bank's internal riskcontrol mechanism,the paper gives some suggestions on the management of the objective credit risk of rural banks.Finally,through the experience of foreign community banks and small banks in rural areas,the paper puts forward some policy suggestions to improve the external environment of rural banks in china.