Research On The Legal Regulation Of China’s Rural Bank

Since2007March, rural banks have got a rapid development, it promotes competition in rural financial market, increases the quantity of money to the countryside. The further development of the rural economy needs support from the rural bank. To ensure the healthy development of village banks, we need legal regulation for the law has guidelines, evaluation, prediction, education, mandatory characters. Rural bank is an independent legal enterprise, they have double features of both commercial and policy banks, the current development speed of the rural bank is rapid, and China has formulated a series of laws and regulations for the rural bank. Something is wrong with the current legal regulation system which includes low level of legislation, imperfect legal system, supervision system is not complete, the credit system, guarantee system is not perfect etc.In order to improve rural bank regulation, Firstly we should improve the legal system, reconstruct the relevant legal system on the base of the clear legislative goal " serving for agriculture, village, peasants", to determine the specific business goal, supervision ethos, supervision objectives, practice of censorship for rural banks. According to the particularity of the rural financial ecological environment, we should vigorously strengthen the rural credit system and guarantee system construction. In face of inadequate power of supervision, unperfected regulatory mechanism, not having supervisory rating system,the lack of supervision experience etc. We suggest off-site and on-site supervision simultaneously, regulatory rating system implementation scheme, main supervisor system, delegated supervision plan, and learn from community banks in the United States, and from Grameen Bank. Meanwhile We should seek help from the people’s Bank of China, make full use of the deposit reserve rate, the discount rate, further loans quantities to support agriculture and other information from the people’s Bank of China. Rural banks in the rural financial services need active support from financial, tax departments, rural banks should positively respond to the financial and tax departments’ arrangement for the welfare of their own development. We should improve the rural bank governance and internal risk control system, establish a reasonable equity, perfect the corporate governance structure, take full advantage of the enthusiasm of shareholders, perfect the system of internal control, manage risks well and defuse them. Make construction of information disclosure; draw a clear statement on disclosure content, way and responsibility. We should establish a rural financial industry association to make them work on the self-discipline. We should construct and increase China’s rural bank deposit insurance formulation, so that the majority of customers can feel their money is safe, attain the goal of maintaining the depositor’s interests in accordance with the law. Make use of notarization in the financial system. The healthy development of rural banks requires a sound legal system to protect it, this is the premise of rural banks to play a dominant role in the new round of reform in the countryside.