The reform of the provincial associations of the two places has taken a new step, and rural small and medium-sized banks have served rural revitalization and cleared risks

Reporter Feng Fengming

The acceleration of the reform of the provincial association is a further deepening of the reform of the rural credit system and rural small and medium-sized banks, and "contributing bricks"
to serving the real economy and helping rural revitalization.

On November 26, the preparatory working group of Liaoning Rural Commercial Co.
, Ltd.
(hereinafter referred to as "Liaoning Rural Commercial Bank") published an announcement in Liaoning Daily that the establishment of Liaoning Rural Commercial Bank by Shenyang Rural Commercial Bank and 30 rural credit cooperatives in the province was approved
.

Since the beginning of this year, the reform of the provincial association has sounded the clarion call
.
In April, Zhejiang Rural Commercial United Bank was officially established, marking the official landing of the "first order" of the reform of the national provincial association
.
In November, the reform plan of Henan Rural Credit Cooperatives was approved by the China Banking and Insurance Regulatory Commission, and Henan Rural Commercial United Bank
will be established.

By the end of 2021, there were 3,902 rural small and medium-sized banks in the country, playing a "main force" role in supporting the development of the real economy and helping rural revitalization
.
However, due to various historical reasons, small and medium-sized banks have also accumulated some risks
.

In this regard, the CBIRC has improved corporate governance, promoted deepening reform, steadily promoted risk disposal, and replenished capital through multiple channels to resolve the risks
of small and medium-sized banks.
Among them, deepening reform includes the reform of rural credit cooperatives focusing on the reform
of provincial associations.

Within the month, the reform of the provincial associations of the two places took a new step

The reform of the provincial association pressed the "accelerator button"
.

On November 26, the preparatory working group of Liaoning Rural Commercial Bank published an announcement in Liaoning Daily that Shenyang Rural Commercial Bank and 30 rural credit cooperatives had completed their internal corporate governance procedures, deliberated and passed the resolution on the establishment of Liaoning Rural Commercial Bank (subject to the name approved by the regulatory authorities), and agreed to establish and authorize the preparatory working group to be dedicated to promoting the specific work
of establishing Liaoning Rural Commercial Bank.

At present, Liaoning Provincial Union has jurisdiction over 2 city-level agricultural commercial banks, 28 county-level agricultural commercial banks and 30 county-level credit cooperatives
in Shenyang and Dalian.
By the end of 2021, the province's various deposits exceeded 700 billion yuan, loans were newly accumulated by 46 billion yuan that year, and the balance of inclusive small and micro loans with a single-family credit of less than 10 million yuan was 55.
91 billion yuan, ranking first
in the province in terms of total and increment of agriculture-related loans.

Previously, the reform of Henan Province Union also took a big step
.

On November 23, according to Henan Daily, the reform plan of Henan Rural Credit Cooperatives has been approved by the China Banking and Insurance Regulatory Commission, which will straighten out the ownership structure from top to bottom, improve corporate governance, promote system reshaping, improve the health of the province's rural credit cooperatives system, and give full play to its role as
a local financial "ballast stone" through the establishment of Henan Rural Commercial United Bank.

At present, Henan Province has established 10 provincial and municipal agricultural commercial banks
in Zhengzhou, Luoyang, Puyang, Xuchang, Zhoukou, Zhumadian, Jiyuan, Pingdingshan Yingcheng, Xinxiang and Sanmenxia.

Since the beginning of this year, policies and decrees on the reform of rural credit have been promulgated one after another, and the direction of reform of the provincial association has become clearer
.

In January, the China Banking and Insurance Regulatory Commission proposed at the 2022 Work Conference that in accordance with the guiding principles of strengthening the party's leadership, implementing the responsibilities of all parties, regulating equity relations, improving corporate governance, and popularizing professional management, "one province, one policy" will accelerate the reform
of rural credit cooperatives.

In February, Document No.
1 of the Central Committee emphasized that the reform of rural credit cooperatives should be accelerated, the governance mechanism of provincial (autonomous region) rural credit cooperatives should be improved, and risks should be properly resolved
.

Under the call of the policy, many provinces have clearly accelerated the reform of rural credit cooperatives
.

According to the 14th Five-Year Plan for Financial Development issued by various provinces, 13 provinces, including Guangdong, Hainan, Jiangxi, Jiangsu, Shaanxi, Anhui, Shandong, Fujian, Hunan, Jilin, Zhejiang, Sichuan and Hubei, have included the reform of rural credit cooperatives in their work agendas
.
Shaanxi, Jiangxi, Anhui and other places have even proposed to be the first to be included in the national reform pilot
.

In April, the China Banking and Insurance Regulatory Commission approved the opening of Zhejiang Rural Commercial United Bank, and Zhejiang Rural Commercial United Bank became the "first single" to implement the reform of the provincial association, which was established on the basis of Zhejiang Rural Credit Union and was composed of
all legal persons in Zhejiang Province Rural Credit Institution.

The industry generally believes that the reform of the provincial association includes four models
: joint bank, unified legal person, financial service company and financial holding company.
At present, Zhejiang Province and Henan Province adopt the joint bank model, and Liaoning Province may adopt the unified legal person model
.

In addition, other models have been explored
in accordance with the principle of adapting measures to local conditions.

At present, the management of banks such as Shenzhen, Guangzhou, Zhuhai, Dongguan and Puning Rural Commercial Bank under the jurisdiction of Guangdong Provincial Union has been transferred to the local government
.
Some researchers say Guangdong may choose the model
of "independent development of several different groups".

Rural small and medium-sized banks serve rural revitalization and re-liquidate risks

By the end of 2021, there were 3,902 rural small and medium-sized banks nationwide, including 2,199 rural credit cooperatives (including rural commercial banks and rural cooperative banks), 1,651 village and town banks, 39 mutual aid cooperatives, and 13 loan companies
.

In July this year, Qi Xiang, director of the regulatory department of the China Banking and Insurance Regulatory Commission, said that the total assets of small and medium-sized banks are 96 trillion yuan, accounting for 29% of
the total assets of the banking industry.
Among them, the loans of small and medium-sized banks and small and micro enterprises accounted for 39% and 46% of the banking industry respectively, making positive contributions
to promoting rural revitalization and supporting the high-quality development of the national economy.

However, due to various historical reasons, small and medium-sized banks have also accumulated some risks
.

According to the "China Financial Stability Report 2021" released by the central bank, some rural small and medium-sized financial institutions have certain risks
.
In the second quarter rating of 4,400 banking financial institutions, agricultural cooperative institutions (including rural commercial banks, rural cooperative banks and rural credit cooperatives) and village and township banks had the highest risk, with 271 and 122 high-risk institutions respectively, accounting for 93% of
all high-risk institutions.

The regulatory authorities' reform of rural small and medium-sized financial institutions has been "on the road"
.

At the beginning of 2021, the China Banking and Insurance Regulatory Commission issued the Notice on Further Promoting the Reform and Restructuring of Village and Township Banks to Resolve Risks, proposing to promote the reform and restructuring of village and township banks, accelerate the replenishment of capital by village and town banks, and effectively resolve risks
.

At a briefing held in May this year, the CBIRC said when talking about the risk disposal of small and medium-sized banks, that since 2018, a total of 627 high-risk rural small and medium-sized banks have been disposed of, and 2.
6 trillion yuan of non-performing loans have been disposed of, exceeding the sum of the previous decade
.

Since the beginning of this year, the CBIRC has firmly grasped the general tone of seeking progress while maintaining stability, solidly promoted the reform of small and medium-sized banks, and carried out work
mainly from the four levels of improving corporate governance, promoting deepening reform, steadily advancing risk disposal and replenishing capital through multiple channels.

Among them, promoting the deepening of reform includes deepening the reform of rural credit cooperatives and accelerating the reform process
in accordance with the principle of adapting measures to local conditions and "one province, one policy".
"In April this year, Zhejiang Rural Commercial United Bank officially opened, marking that the reform of rural credit cooperatives focusing on the reform of provincial associations has entered a substantial stage
.
”

In November this year, Huang Xiangyang, vice chairman of the Hunan Provincial Associated Press, said in a speech at the Guangxi Conference of the Fourth China Agricultural Finance 30 Forum that as more and more provinces have become rural commercial banks, the provincial association system is facing many difficulties in both nominal and practical operation, and reform is imperative
.

The person in charge of S&P Credit Review predicts that after the restructuring of the provincial association, the rural commercial bank will improve its business strength, capital strength and risk management ability, while maintaining the fundamental positioning of rural financial institutions in serving the "three rural areas" and the traditional advantages
in deposit base.

As the "main play" of the reform of rural credit cooperatives, the reform of provincial associations will coordinate the reform and risk resolution of rural small and medium-sized banks, thereby further removing obstacles
to serving the real economy and comprehensively promoting rural revitalization and improving quality and efficiency.

Preliminary review: Li Song Responsible editor: Zhang Jiazhen Review: Peng Zonglu