Research On The Reform Of Rural Credit Cooperatives In Sichuan Province

The 2015 No.1 document of Central Government, some opinions on Strengthening Reform and Speeding up Modern Agricultural Construction point out that we should utilize policies of fiscal levy, money & credit, financial regulations to promote reform of rural financial system and put more financial resources on "Three Rural Issues" to guarantee that the total agricultural credit keeps increasing and the proportion of agricultural related loan doesn't fall off. Rural credit cooperatives is the main force to solve "Three Rural Issues" and major composition for rural finance. Therefore, reform of rural credit cooperatives is the top priority.Since the establishment of rural credit cooperatives in China in 1951. they have experienced reform many times. The latest round started from 2003 with the State Council publishing Notice on Pilot Program of Deepening the Reform of Rural Credit Cooperatives. The notice announced the official start this pilot program in eight provinces and cities. The aim of this reform was to make rural credit cooperatives under clear ownership, scientific management, restraint mechanism, financially sustainable development and commercial principles, and mainly serving for "Three Rural Issues". As the reform further develops, the focus of the reform is that reform mode should be applied to rural credit cooperatives. After pilot of many places and years of practice, the government gradually found out the direction of rural credit cooperatives reform, which is the reform of their shareholding system.Therefore, China's Bank Regulatory Commission began to speed up the shareholding system reform of the rural credit cooperatives, and encourage qualified cooperatives to reorganize as rural commercial banks. The commission declared that they wouldn't set up any new rural cooperative banks and the existing rural cooperative banks should change to rural commercial banks as soon as possible. With the efforts of regulation departments, the number of domestic rural commercial banks has reached 850 until now. Anhui and Hubei provinces have already completed the reform. Compared with other pilot provinces, western area ones started later, but they quickened the pace in past several years. At present, Sichuan province has reorganized 36 rural commercial banks, ranking No.1 among all the western provinces. Also, the reform of one rural cooperative bank and 71 rural credit cooperatives is under steady progress. What's the results of reform for Sichuan rural commercial banks? Have they all achieved the reform objectives? Is there any problem during the banks'development after reform? How to deepen the reform in next step? They're all topics deserving to explore.This paper integrated theoretical analysis with case studies. Firstly, it analyzed the development history of China rural credit cooperatives and background of reform, and demonstrated the necessity of shareholding reform of rural credit cooperatives. Secondly, it introduced and analyzed the reform of the first batch of provinces that conducted the reform and had remarkable achievements, and then came to a summary of their reform and development. Thirdly, it introduced the current status and achievements of rural credit cooperatives reform in Sichuan province, and then took Jianyang rural commercial bank as example and analyzed the precondition, basis and progress of its reform. This article put more emphasis on researching the achievements and shortcoming of Jianyang rural commercial bank reform:first, it analyzed the corporation governance's effectiveness and changes of its ownership; second, it utilized CAMEL rating system to analyze its business performance from capital adequacy, asset quality, management, earnings and liquidity; third, it analyzed its service abilities for "Three Agricultural Issues" and small & micro businesses; fourth, it analyzed the difficulties and inadequacies that hindered the development of Jianyang rural commercial bank. At the last chapter of this article, based on the problems after the reform of Jianyang rural commercial bank and general issues of Sichuan rural credit cooperatives reform, some suggestions has been given for deepening the reform of rural commercial banks and promoting their development.