Research On The Internal Control Of Rural Banks

At present,both the risk management level and the methods of rural banks exist a big gap compared with the large-scale commercial banks in China.Meanwhile,the domestic financial environment in rural area presents such a state: high risk,high cost and lower yields.With the macroeconomic downturn,the banks established in rural area,consequently,are surrounded by some of greater risks.However,in the preliminary stage,the vast majority of rural banks only placed emphasis on their business development and ignored risk management and control.That is why some of them bumped into risks frequently.In 2017 the China Banking Regulatory Commission(CBRC)started carrying out a new model,strong supervision and strict accountability,and exempted the special treatment of rural banks.The supervision modal equal to other commercial banks exposed the weak bank internal control.As one of important parts of banking system,since 2007 rural banks have had many problems that were deemed as the imperfect internal control,like the inadequate governance of legal person,the insufficient awareness of compliance risk of executives and so on.Therefore,how to perfect the internal control system is not only an issue faced by rural banks but also an issue to address for insiders of banks.For all this,with the research of constituent elements of the internal control and previous studies from analysts,this paper will take A Bank as an instance to find out the drawbacks in the internal control.At the same time,for the purpose that A Bank could build up a comprehensive and sound internal control system in a short period,this paper will combined the theories analysis about internal control with the experience of other banks to optimize its internal control system,and provide the concrete measures,so that this paper can expedite thewhole construction of A Bank's internal control system.This paper has six parts.The first part mainly introduces the background that rural banks are in urgent of rebuilding their internal control system in order to lead to the main body of this paper.The second part is theoretical overview section.It introduces the definition and development of internal control,and reviewed the domestic and foreign literature overviews.The third part takes Bank A as an example to analyze its current internal control development status.The fourth part brings forward the problems that exist in the construction of internal control system of A Bank according to the five requirements of internal control.The fifth part,for the demerits existing in the A Bank,refers to the construction requirements of internal control system and the previous experience from the big state-owned banks,and make some suggestions about how to optimize the internal control system.