Study On The Credit Risk Management Of R Rural Bank

To solve the financial repression problems of banking institutions in rural areas, such as lowering coverage rate, inadequate competition and absence of financial services. On December22,2006, the CBRC promulgated "several suggestions on adjusting and relaxing admittance restrictions of banking institutions in rural areas to support the construction of new socialist countryside". It put forward several related policies of adjusting and relaxing admittance restrictions of banking institutions in rural areas, encouraged and guided financial institutions and various domestic and overseas capitals to increase financial investment in rural areas, established rural banks and other new types of rural financial institutions. With a large number of rural banks was born, these banks were contributed to accelerate formation of rural financial competition pattern, played a positive role to solve rural funds dilemma. However some good and some bad management situations buried next hidden trouble to their sustainable development. Especially, risk management has always been the soft costal region of rural banks. Rural banks were micro-financial institutions which provided services for fanmers and minor enterprises. They faced many kinds of risks which came from market, customers and themselves. The credit risk is one of the most important risks. Therefore, to improve rural banks’ credit risk management is an important work for rural bank in current and future.Based on reviewed and analyzed rural bank and risk management theories, The article cleared the related concepts and theories, and ultimately determined the research thought and methods. Firstly, the article simply introduced the basic situation of R rural bank and it’s credit business, analyzed the credit risk performance and causes. Secondly, it analyzed credit risk management procedure, credit rating mechanism, guarantee and mortgage mechanism, interest rate pricing mechanism, and risk control mechanism of R rural bank, pointed out it’s problems. According to aforementioned risk management deficiencies of R rural bank, it proposed four principals in R rural bank credit risk management, such as the overall risk management, standardized risk management, the combination of qualitative and quantitative as well as the principles of operational risk management principles. Then it proposed to improve credit risk identification, establish risk assessment and early warning mechanism and construct credit and credit risk control system to realize comprehensive risk management. Finally, suggestions on perfecting credit procedure supervision, improve the credit business competence, create a sound social credit system in the rural areas and other risk management measures so as to realize the security mechanism in rural banks risk management.