Research On Loan Pricing Of Chinese Rural Bank Based On RAROC Model

With the interest marketization progress, Chinese Rural Commercial Banks begin to achieve more and more pricing rights, which puts forward higher requirements to establish scientific and rational inside pricing system.This paper reviews comparatively influential researches from both home and foreign countries and does summarization from three aspects which are loan pricing theories, RAROC Model and loan pricing of rural commercial banks. On the basis of literature review, this paper analyzes the pricing abilities, conditions and problems of rural commercial banks in the background of interest marketization.After the comparison between RAROC Model, traditional pricing models and current pricing methods used by rural commercial banks, this article introduces Risk-adjusted Return on Capital Model. Not only introduces the theories, this paper also estimates important factors based on historical data from database of ZJ Rural Commercial Bank from quantitative aspect. In this way, my paper provides practical approaches for Chinese rural commercial banks to pricing loans based on RAROC Model. In addition, this paper makes some improvements on calculation of Expected Lost, making the model more convenient to use.Additionally, this article also gives recommendations on implement of RAROC Model from three aspects.