Research On The Development Of Retail Business Of City Commercial Banks Under The Acceleration Of Interest Rate Marketization

The interest rate marketization is an essential part of Chinese financialreformation system. Interest rate marketization will improve the efficiency offinancial markets, create fair competition for financial environment and promotesustainable development of economy. City commercial bank is a financial institutionwith Chinese characteristics, playing more and more significant role in China’sbanking system. The experience of developed countries shows, in the process ofinterest rate marketization, spreads will be narrowed and competition will beincreased, banks will face lower profits. Because of small size assets, imperfectbusiness structure, weak risk management, unreasonable service tunnel, interest ratemarketization will bring greater challenge for city commercial bank. Therefore, citycommercial bank should accelerate business transformation, enhance the non-interestincome. Retail business is banking and financial service for the individuals, families,and medium and small-size enterprises. With huge customer base, risk diversification,stable profits, little capital occupation and other advantages, retail business become anessential selection for city commercial bank, if they want to overcome the challengeof interest rate marketization.This paper first describes the process of China’s interest rate marketization andcurrent status of city commercial banks, and then discusses the influence of interestrate marketization for city commercial banks. Second, this paper analyzes the featuresand importance of retail business, and summarizes the present situation and exitingproblems of city commercial banks’ retail business. Subsequently, this paper sums upCitibank’s outstanding performance and successful experience in retail business forthe development of city commercial banks. On this basis, the author analyzes thechallenge and opportunity for retail business development of city commercial bank,and proposes corresponding strategies. This is also the focus and innovation of thispaper. Finally, giving the comprehensive conclusion based on the above study.