Research On The Legal System Of Village Bank

It has clearly been proposed since the Eighteenth National Congress of the Communist Party of China that the strategic goal of "speeding up the development of private financial institutions" is the key financial work in the future which relies on private financial institutions reform and can promote the structural reform of supply side in China. The private financial institutions are embodied in the following major sectors:private banks, securities companies, trust companies, insurance companies, loan companies and village banks. And the reason why village banks arise at the historic moment is to solve the financing difficulties in rural areas in China and the structural problems of the supply side.Since the China Banking Regulatory Commission allowing the establishment of village banks at the end of 2006, village banks have developed in the vast areas of our country or in the township-level administrative regions. With the vigorous development of village banks, the financial hollowing reality has been effectively alleviated in some rural areas in China. However, due to the time of the establishment is only ten years,there are still many problems in the establishment of village banks, operation and exit mechanism. From the general theory of rural banks, combining with the practice of foreign and domestic financial markets in rural areas, this paper analyzes the shortcomings of the village bank in the establishment of village bank, the operation process and the’ exit system. This paper then puts forward some corresponding suggestions and solutions to the perfection of the legal system in order to promote the healthy, stable and sustainable development the village banks in our country.The paper is divided into four parts:The first part introduces the concept and legal nature of the village bank based on the general theory of the village bank. Secondly, this paper makes a detailed comparison between village banks and other financial institutions. Finally, this paper discusses the necessity of the village banks in China.The second part mainly analyzes the status quo, respective legal systems and legal experience of American community banks and Grameen Bank in Bangladesh. Then this paper researches the legal system and experience for the village banks in our country through the investigation of the existing village banks in the international financial market.Through the analysis of the status quo of the legislation of village banks in our country,the third part points out the problems and the insufficiency which exists in the legal system of village Banks in our country. This paper discusses and analyzes the defects of the establishment of village bank, the lack of operational processes and shortage of the exit system of village bank.In the fourth part, from the establishment system, the operation system and the exit system of the village banks, this paper puts forward reasonable suggestions and corresponding measures for the perfection and improvement of the current village bank legal system in order to ensure the healthy development of village bank in China.