Predicament Of Chinese Village Banks And Solutions

To accelerate the reform of rural development and to reach the aim of building a moderately prosperous society in all respects is the most important work of economic development and reform in China. To financial support the development of a new socialist countryside, it is necessary to be held up by an open, orderly and competitive rural credit cooperatives. The issue of rural finance is always an important bottleneck to the development of agricultural and rural economy and a hot spot to solve the problems of villagers, countryside and agriculture. However, the existing rural financial organizations become harder and harder to meet the various requirements of funds and services of villagers, countryside and agriculture. To ease the above conflicts, the banking regulatory commission of China published"Some advances about adjusting and relaxing the entry policy of financial institutions in the rural banking sector and better supporting the development of a new socialist countryside"in 20th, December, 2006. The document advocates that under the condition of low entry policy and serious supervision, it is allowed to open rural financial market and set county bank, finance company and mutual-aid groups of rural funds in the rural financial market. Then the county banks evolved quickly like mushrooms. The county bank is the product of building a moderately prosperous society and reform of rural economic reform. It plays an important role in the way of releasing the contradiction in the supply and demand of rural fund, improving rural economic system and promoting rural economic services.As an emerging thing, county bank is definitely to happen to meet many troubles in the process of development. So far, county bank is facing the following predicament: it firstly stands at policy. County bank is lack of support of currency policy and government. It is also ruled unclearly by People's Bank. It secondly stands at operation. It has a few bank outlets, low social reputation, and single route of fund and CMU system. It thirdly stands at administration. It has shortage in the administer structure of artificial person. It may face the problem of high risk of operation and credit and low professional competence of staff. Such problems not only lie in itself, but also in the outside. It is necessary to clarify the problems in the development and internal and external restricting factors, so that it will promote the continuing development and play its role. Jiangdu Jiyin County Bank is the representative of many county banks. This bank has achieved a lot in the deposit, loan, customer relationship and internal administration, but it also has some problems in operation. The situation can reflect the most developing problems of most county banks. What's more, Jiangdu Jiyin County Bank is situated at the more developed region and is operated well. It is worse for those county banks which are situated at the less developed regions.In conclusion, county bank faces a lot of problems and meets many practical troubles in the process of setting up, operating and developing. It is the situation that the emerging thing has to face in the process of emerging and developing. To improve the operation of county bank, it is necessary to find out the way to solve the problemsfrom internal and external conditions. The key point to solve problems is to enhance understanding and change mind. No matter the government and financial supervision and management departments, or the operator of county banks, they should have a correct awareness of the status and role of county banks in the Chinese rural economy and the feature of offering financial service to micro-lending organizations. Under such conditions, to form an operation mode of micro-lending organizations by making and publishing related policies and effective incentives can adapt to the financial demand of farmers and cooperates related with agriculture and the demand of Chinese rural financial development. In the end, county bank can possess the capacity of long term and stable development...