The Legal Issue Research Of New-type Rural Financial Institutions Supervision

Because that the traditionally formal financial institutions are reluctant to finance to the high-risky, small-scale and seasonal farmers in rural areas and SME, New-type rural financial institutions gradually emerge. New-type rural financial institutions, as an important part of multi-level rural financial market, in practice, provide convenient and diversified financial services for farmers and rural SMEs. Based on the risk restraint and market stability, the supervision of new rural financial institutions is essential. With the establishment of new rural financial institutions, the problem of insufficient supply of rural financing body has been eased, but the contradiction of the insufficient condition of the rural financial regulation is more and more prominent. The current regulatory regime is almost the same supervision mode of commercial bank in city, there is no regulation for the new rural financial institutions particularly, as the result, there is a situation where we can not grasp the quintessence at the macro level, and also involve too much things at the micro level, so that, new rural financial institutions are facing with many problems during the development period.To resolve the regulatory issues of new-type rural financial institutions, we must set goals from starting new rural financial institutions which aiming to explore new regulatory system design of rural financial institutions. The primary goal of setting up new rural financial institutions is to meet the financing needs of vulnerable groups in rural areas, namely the “agriculture” goals. Because that, farmers and rural SMEs are in the small-scale and have the high risk due to the dependence on natural agricultural economy, and are lack of mortgage collateral and other reasons, the traditional rural financial institutions are reluctant to provide financing for such a body. The establishment of new-type rural financial institutions aims to meet the financing needs of these groups. However, new-type rural financial institutions are difficult to obtain long-term development if just treat them as the mechanisms to help the poor agriculture, so we must make the New-type rural financial institutions in rural areas profitable in order to maintain the sustainable development, namely that the new rural financial institutions should reach “profit” target. These two goals provoke the unique regulatory requirements: the feature of “helping agriculture” requires the strict control of "agriculture" services in order to prevent they from deviating from rural areas to urban areas. At the same time, many areas do not have financial institutions, so we need to achieve greater market access for agriculturally financial institutions; the feature of “profit” requires guarantees for the sustainable development of new rural financial institutions, such as the care of the interest rate policy, the support of taxation policy, the perfection of control systems on the risks and so on. However, the current regulatory system, in many ways, suppress the feature of “agriculture” and “profit” of the new rural financial institutions. For examples, the agriculture evaluation system is imperfect, the regulatory system of agriculture is not in place, the market access system has some restrictions. And in the part of feature of “profit”, the follow funding restrictions is unreasonable, the competitive safeguards is lack. The current regulatory system is imperfect, there are still unreasonable regulatory body, the lack of risk control measures.Therefore, the perfection of new rural financial institutions regulatory system must put the feature of “agriculture” and “profit” targets as the starting point, namely to establish the regulatory principles of new-type rural financial institutions for protecting the targets of the feature of “agriculture” and “profit”. We should promote the sustainable development through the establishment of evaluation and incentive system, the decrease of regulatory restrictions on market access and the follow funding restrictions, the increase of the competitive safeguards, the improvement of regulatory body,and the improvement of Risk control measures.This thesis is based on the regulatory practice of new-type rural financial institutions, through the authoritative statistics and expert monographs, the analysis of multiple cases and the analysis of current situation of regulation, to put forward the suggestions for the new-tape rural financial institutions regulatory system.