Research On The Problems And Countermeasures Of Zhejiang Private Capital Holding Bank

March 11,2014 the first batch of China Banking Regulatory Commission identified a pilot program of five private banks, which makes the private banks and private capital holding banks become a hot topic again. From 21 years ago proposed the development of the private financial institutions, China only has China Minsheng Bank as a private bank, there are just more than 100 small banks of China whose private capital is more than 50% of the total, private capital controlled ones is less. The total GDP of China has more than 60% are created by private economy, which means that domestic private capital holding banks are too little to meet the needs of China’s private economy. Most of private economy is small and medium enterprises (SMEs), state-owned banks and other state-owned large commercial banks have the higher average cost of handling small and medium businesses, and they don’t have enough energy to distinguish there information that is not complete, so they refused to financial services for SMEs, which cause the problem of SMEs financing. Also state-owned banks can’t operate in accordance with the market-oriented, resulting in low efficiency of resource allocation. The original system of banking institutions has begun to expose problems, needing private capital holding banks to improve China’s financial industry. In this paper I choose the private capital holding banks of Zhejiang province that has the most developed private economy of the country for the study. And select Taizhou Bank, Zhejiang Taiylong commercial banks, Zhejiang Mintai commercial banks and Zhejiang Chouzhou Commercial Bank four banks as the focus analysis, they are doing very well rely on their own unique way of doing business.The private capital holding banks of Zhejiang province have good developments, this paper analyzes there advantages that can provide useful experience for the development of other private capital holding banks. Firstly, prove the efficiency of private capital holding banks are higher than other types of banks by using DEA model analysis. Secondly, Zhejiang developed private economy provides ample private capital. Thirdly, privatized ownership structure will help the bank to achieve separation between government and enterprises, following market developments. Fourthly, the private capital holding banks has simplified structure, developing programs more efficient and more flexible. Fifthly, government support provides a good external environment for the development of private capital holding banks. Accordingly proposed the development of private capital holding banks needs to be positioned accurately, continuous innovation and differentiated management, ensure Privatization ownership structure and governments support several points to be reference.Although the development of private capital holding banks in Zhejiang is very well, there are still some developing issues need to be addressed. Such as local dependency, small asset size, credibility disadvantages, at their own risks, related transaction risk control and so on. According to above this paper presents several countermeasures including:site-specific model innovation, reasonably expanding replenishment channel and improving competitiveness, implement their own risk problem from inside to outside, improving the corporate governance structure, hoping to be helpful for the banks.