On The Improvement Of The Legal System For Rural Banks In China

Currently, the concept of inclusive finance has been widely spread in china, and it is not only a hot topic of research, but also an important policy orientation. Speeding up the construction of rural inclusive financial system is a significant measure for the Party Central Committee and the State Council to develop vigorously the finance of the people’s livelihood, to alleviate the gap between urban and rural areas and to promote the harmonious development of the society. Rural bank shoulder the mission of supporting agriculture, and it is an important support for building inclusive financial system, and is the concrete practice of inclusive finance in china. The development of rural bank is beneficial to reform china’s rural financial system, to improve the quality of township financial services, to build diversified rural financial service quality. However, since the birth of rural bank in 2006, the rural bank has encounter a lot of problems, for example: the deviation of market positioning, the rural banks are not really “village”, the community credibility is not high, the difficulties to absorb deposit, the small-scale, the less outlets, the poor profitability, the inadequate risk control mechanism, the poor ability to Royal insurance, the relevant laws and regulations are not perfect, the lack of policy support, the lack of development motivation, etc, especially the lack of laws and regulations, has affected the sustainable development of rural banks seriously. At present, the “Provisional Regulations on Management of Rural banks”(Hereinafter referred as “the Interim provisions”)and the “Supervision View on the Strengthening of Rural bank” that had supported the framework of rural banks ‘s legal system was invalid in 2014, but there is no relevant legal norms to replace them, and the most relevant laws and regulations of Rural banks was scattered sporadically in other related legal documents, which is a serious disadvantage for the long-term development and for the establishment of rural inclusive financial system.From diverse perspectives of law, this paper puts forward the legal Suggestions for the sustainable development of village Banks. First of all, the introduction section introduces the background, the significance of Rural banks, literature review, the main research methods, the structure of the paper and the paper’s mainly innovation and inadequate; Second, the first chapter introduces the current situation of the development of Rural Banks in our country,the legal system and the existing problems; Thirdly, the second chapter introduces the development experience and the relevant law making of the foreign similar rural financial organization about America Community Banks and Bangladesh’s Grameen Bank, then introduces its enlightenment to our country’s Rural banks. The third chapter is the core of this article, it comes up with many perfecting suggestion for the legal system of Rural banks from different angles, such as from the perspective of legislation, the author proposed to improve the legislative level about Rural banks, while perfect the relevant laws and regulations; From the perspective of the government policy, the author suggested that the government should provide more supports and less interference to improve Rural banks “brand effect”; From the perspective of the Rural bank itself, the author encourage Rural banks to clear their market position, maintaining its “support agriculture and small”, and the purpose to service agriculture, rural areas and farmers. Also this paper suggested that Rural banks to constantly innovative business model, to development financial services products that suited to the characteristics of local areas, in finally to improve the profitability; From the perspective of credit guarantee, it suggested to improve the rural credit system, to innovative guarantee model, to solve the problem for farmers’ hard to mortgage and loans; From the perspective of risk control, it is recommended to improve risk control system of Rural banks from both internal and external, to strengthen supervision and improve the ability of Royal Insurance. The above countermeasures and Suggestions is to promote the sustainable development of village Banks, promote the establishment of rural inclusive financial system.