Differentiation Strategies In Transitions Of Rural Commercial Banks

With China’s economic transformation, financial deepening together with financial disintermediation and capital constraints, the banking industry faces increasing challenges. Therefore, the commercial banks must accelerate the pace of transition and upgrading to tackle the challenges and problems, as well as enhance their competitiveness. For rural commercial banks(RCBs), how to speed up transitions has become a strategic subject.On the basis of summarizing some disciplines to transitions of commercial banks, this paper mainly studies on the necessity, importance and feasibility of implementing differentiation strategies in transitions of RCBs in Jiangsu province. Starting from a theoretical research on some key factors and reasonable directions of transitions, this paper discusses diversified directions, paths and measures taken by RCBs during their transitions. At last, this paper summarizes some regular patterns in transitions of RCBs.There are three conclusions in this paper. First, it emphasizes that localization in market positioning, differentiation and modernization of management are THE three key targets that RCBs must achieve during transitions. Second, given the specific locations and markets, RCBs should have different focus. For RCBs in urban areas, being the regional banks is a rational object; while in counties of developed areas, RCBs should transform to modern retail banks; and the rest had better transform into community banks specializing in serving the agricultures. Last but not least, the author offers several reflections on the urgency, progressiveness, diversity, constraint, strategic meaning, regularity and riskiness of transitions of RCBs.