Discussion And Exploration Of Legal System For Rural Bank

In order to solve the low coverage of banking outlets, the financial supply shortage, inadequate competition and related problems in the rural area. China began the incremental reform of financial institutions at the end of 2006. Rural bank is the dominant force pilot in the current round of new-type rural financial institutions. Up to now, China had established more than 100 rural banks and the number continues to grow.The emergence of rural banks brought new hope to the long existed rural financial problems from the reform. Rural banks take the commission of supporting agriculture, and it possesses the nature of the rural communities of small commercial banks. Comparing the inadequate supply for the rural commercial market with the potential demand is substantive elements for its development. As rural banks is presenting newly in the financial industry, it has been restricting in the trial process, above all, the deficiencies in the legal system is the biggest challenge. Currently, the rural banks of the legal institutional framework primarily consists of the "Provisional Regulations on Management of Rural banks," and other relevant laws and regulations .Although the current legal system supply the basic support to the normal operation of rural banks, but in the bank's risk control and survival control legal system has many imperfections, mainly for the compensation mechanism for risk diversification not healthy and immature regulatory system, which will bound rural bank for development and sustainable operation of their future a significant negative impact .To this end ,the intensive consolidation is on a high demanding for the current complex system, contingency is a strong sense of various rules of, timely adoption of legislation or administrative regulations issued in the form of improving its legal form, in the legal system optimization and integration framework based on the construction and improvement of rural banks operation of the legal system. Risk control, to increase the supply of government policy to support efforts to make it safely through a start-up phase, the establishment of social credit system to address the rural bank for rural services, the asymmetric information problem. At the same time, diversification of business models to establish the agricultural insurance system and the implementation of the principle of limited pay the mandatory deposit insurance system. Link in the collateral, to the right of rural land contracting mortgage reform, the establishment of pilot primary land mortgage organizations, and "Panel + center" of Mutual security model for rural credit cooperatives by the current situation only through the introduction of the relevant provisions under the promotion of to rural banks and other new-type rural financial institutions. These initiatives will benefit to the dispersion compensation rural bank's operational risk, its development secure protection; in the supervising and monitoring factor, the related department need to abide by the flexibility of the costs, benefits matching and supervision of the regulatory diversity, strengthen the regulatory power of the restriction and supervision, regulators need a reasonable allocation of regulatory powers between, increase supervision of the local regulatory authority. In the current basis of separate supervision, improve the regulatory mechanism of inter-agency coordination and cooperation, explore the functional regulation of the pilot.Legal System in the specific design, to further relax restrictions on access to rural bank, reform the banking market towns and villages way out, and strengthen risk control and operations in advance of risk control, strengthening legal supervision and program development. At the same time, through the industry self-discipline, social supervision and internal control mechanisms of the banks to improve banking supervision to build multi-village governance. At the early stage in the development of China's rural financial market, risk existing with opportunities, rural banks need to reform and innovation to adapt to the changing market environment, but also requires a sound legal system to provide effective protection for their healthy growth, which is rural bank in China in the new round of rural financial reform to play a main force of the premise.