The Study Of Legal Countermeasures Of Village Bank's Development

Village bank is a new type of banking financial institutions in rural area emerged from end of 2006, when the access policy of banking financial institutions in rural area became more flexible. It is featured with small scale of capital, diversified structure of property rights, simple and flexible structure of corporate management, and restricted business operation. From the legal nature point of view, village bank is not policy bank. Although its development has a certain degree of policy orientation--the available funds after paying the deposit insurance must be used for the construction of the local rural economy, and it can't deal with other districts. But the purpose of operating, form of ownership and other characteristics of the village banks are different from the policy banks. Village banks also differ from commercial banks which are adjusted according to Act of Commercial Banks in the registered capital, structure of corporate management and structure of equity. Essentially, village banks are commercial banks which serve rural area. The significance of the development of village bank lays in increase the supply of credit finance in rural areas, reduce the outflow of rural credit funds and increase the competitiveness of rural credit financial markets. But at present, the development of village banks is slow. It is difficult to take in deposits, and the operational risk is high, the development of town banks is in difficult position. The community banks in the United States are small to medium-sized banks in the U.S. banking system. The community banks play a good social role and are well functioning in the United States. Most of the required loans for small to medium-sized enterprises and small farmers in the United States come from the community banks. The successful development of community banks in the United States is due to effective business model, flexible corporate management structure, good institutional environment and effective supervision. Village banks are very similar to the community banks of the United States in asset size, governance institution and regional operation. And village banks are expected to play the similar social role as community banks of U.S. in the provision of loans for small to medium-sized enterprises and farmers. Community banks in the United States were developed through effective market competition in a good market environment. But village banks were developed in the policy-oriented market governed by the government; there were too much governmental intervention. In order to develop the village banks, on one hand, it's necessary for the banks to have correct self-orientation and establish a good business model by their own; on the other hand, the government should put themselves on a correct position, reduce the inappropriate intervention in the development of village banks, provide the banks with necessary support, build and improve the relevant legal system, and create a beneficial market environment. In order to develop the village banks, we need to improve the market access system, establish the implicit deposit insurance system, improve the rural credit guarantee system, improve the rural credit management system and establish the effective regulatory system.