Recently, village banks in Henan have begun to make moves.
Many friends are beginning to worry, if this continues, will village banks be finished?
Although rural banks are among the “youngest”, “lowest seniority” and “smallest” in my country’s banking system.
But after all, it is still in the development stage, and it is unlikely that it will completely die out because of such an incident.
Why do you say that?
What role do rural banks play in the banking system?
Let’s first understand why village banks were set up in the first place?
We might as well think about it first, what does a bank mainly do?
Modern banks have the three most important businesses, which are deposit taking, loan granting and settlement.
Then, if this bank is set up in a village or town, the intention is obvious, serving agriculture, rural areas and farmers:
agriculture, rural areas and farmers. When
was first established, everyone had differences. On the one hand, they believed that if they were to be implemented, these small banks would have complex business operations and insufficient risk resistance. Why did
do it again later?
Because everyone has made some calculations, we have a large area and a large rural population. If we do it well, it is possible to produce scale effects.
"Financial development level, major shareholder shareholding ratio and invested capital, author: Lu Zhiqiang, Xiong Deping"
If you are from a rural area, you may have the impression that to withdraw money locally, you have to travel a long way, at least 1KM, usually You have to go to the local agricultural and commercial store.
Therefore, the task of solving the "last mile" of rural finance is left to village banks.
In the past, there were only rural commercial banks and postal savings financial entities in rural China, and there was no way to fully meet the needs of farmers.
Therefore, after a village bank is established, according to regulations, it can also absorb deposits from the public, issue short, medium and long-term loans, handle domestic settlements, etc.
As long as it is approved by the China Banking Regulatory Commission, it can be done.
Rural commercial banks also have many branches. What is the difference between them and village banks?
) In terms of registered capital: the minimum limit for rural commercial banks is 50 million yuan, and rural banks have different requirements according to the place and type of establishment;
) In terms of promoter system: rural commercial banks have rural commercial banks , rural cooperative banks, and rural credit cooperatives The main promoters of rural banks shall hold no less than 15% of the shares, and there shall be at least one financial institution among the promoters;
) Business scope: Village banks shall not engage in the issuance of financial bonds, buying and selling of government bonds and financial services without approval. Bonds and other businesses;
4) Business restrictions: All available funds of village banks should be used for local rural economic construction, and can be invested in other industries only after meeting local rural capital needs.
In general, the development of village banks can be divided into three stages:
) 2006-2012: 2006 Central Document No. 1 clearly encourages the establishment of multiple ownership institutions in counties, and standardizes shareholder qualifications and corporate governance accordingly. , the number of village banks established reached its peak in 2010.
) 2012-2020: Supervision continues to improve, rural bank rating methods and risk treatment methods are gradually introduced, and the number of rural bank establishments declines.
) 2021 to present: The "Notice on Matters Concerning Further Promoting the Reform and Reorganization of Rural Banks to Resolve Risks" clearly proposes to speed up the replenishment of capital of rural banks and strengthen risk disposal, and supervision will gradually shift to risk prevention.
According to statistics, as of the end of 2021, China Banking and Insurance Regulatory Commission had approved the establishment of 1,651 village and town banks. The institutions have covered more than 1,300 counties (cities, banners) in 31 provinces across the country, with a county coverage rate of over 71%. They have already played an important role in rural finance. It's a new force.
There are traces of the "thunder explosion"
I looked through the information. To be honest, if this thunderstorm was seen by someone within the system, it should not be completely traceable.
Rural banks have been facing many problems since their development:
- They are operated under a legal person system, and their governance structure is imperfect, which makes them easy to be manipulated by individual major shareholders or conflict with the sponsoring bank;
- Their social credibility and brand influence are insufficient, resulting in It is difficult and expensive to attract deposits;
- The market competition environment is unfair (for example, according to relevant regulations, local treasury funds cannot be deposited in village banks; it is difficult to enter the interbank dismantling market, etc.), resulting in slow business development; insufficient innovation capabilities, simple copying of the main issuer The business has a single type of business and a weak ability to withstand risks.
- Major state-owned banks and Internet banks have been involved in rural business, grabbing customer resources, further intensifying competition in the rural financial market;
From the picture, 80% are managed by local state-owned enterprises and private enterprises. From the registered capital point of view, , the registered capital of village banks is generally less than 100 million yuan, and public enterprises, central state-owned enterprises, local state-owned enterprises, private enterprises.
In addition, there are two findings:
1. What is the lowest
ROA of rural banks? It’s based on return on assets.
Return on assets = net profit after tax/total assets, which is an indicator used to measure the net profit created by each unit of assets.
Judging from the picture, the performance of rural banks is not ideal.
2. The non-performing loan ratio is the highest among rural banks.
This is easy to understand from the name. It refers to the proportion of non-performing loans to total loans.
This ratio is one of the important indicators for evaluating the security status of credit assets of financial institutions.
What are non-performing loans?
means that when evaluating the quality of bank loans, loans will be divided into five categories based on risk: normal, special mention, substandard, doubtful and loss. Among them, substandard, doubtful and loss are defined as non-performing loans.
In other words, the higher the non-performing loan rate, the greater the proportion of loans that may not be recovered to total loans; the lower the non-performing loan rate, the smaller the proportion of loans that financial institutions cannot recover to total loans.
If you live in a rural area, or your parents live in a rural area, you may consider transferring money from a village bank to a rural commercial bank first.
The ROA of rural commercial banks is higher than that of city commercial banks, and the non-performing loan ratio is twice as low.
What will be the impact after this crisis?
We can refer to the handling method of Baoshang Bank and make a guess:
Method 1: Establish a new bank to undertake acquisition business + bank bankruptcy liquidation
After the bankruptcy of Baoshang Bank, the deposit insurance company, together with Jianxin Investment, emblem Commercial Bank and Inner Mongolia Autonomous Region Finance Department 8 sponsors established Meng Commercial Bank to undertake the assets, liabilities and related businesses of Baoshang Bank in the Inner Mongolia Autonomous Region and do not operate across regions.
guesses that these four companies in Henan will most likely refer to this approach.
Practice two: full protection of small claims + partial protection of large claims + secondary capital bonds write-down
Actions have already been taken on this point, and those under 50,000 yuan have been gradually registered for compensation. Follow-up estimates More safeguards will follow.
Referring to Baoshang’s practice, based on May 2019, the insolvency amount of Baoshang Bank was 220 billion yuan.
html All claims below RMB 150 million are fully protected, large claims above RMB 50 million are partially protected, and the protection level for all claims is nearly 90%. And the 6.5 billion yuan secondary capital bonds issued in 2015 were fully written down.
Practice three: The central bank or the joint deposit protection fund jointly take action to rescue
I estimate that many friends across the country who buy village bank deposits are because of the existence of the " Deposit Insurance Regulations ".
This regulation was promulgated in 2014 and established in 2015. A deposit insurance fund management company was established in 2019 with a registered capital of 10 billion yuan.
Covers all deposit-taking financial institutions, including domestic commercial banks with legal personality established in accordance with the law, rural cooperative banks, rural credit cooperatives, etc. All deposit-taking financial institutions that meet the conditions should participate in deposit insurance.
As of June 2021, a total of 4,026 banks participate in deposit insurance.
So where do these premiums come from? In fact, I still paid it myself from the financial institution.
It really comes in handy if something goes wrong.
would like to remind everyone that if you do encounter one, don’t panic, just calm down and wait for the news, and register when it’s time to register.
Finance requires both development and stability. The [Village Bank] issue can be used as a warning, but there is no need to kill it with a stick.
As I said at the beginning, it was established not long ago, its status is not high, and its management is not perfect. These are all things we can think of ways to improve.
But if it is cut off across the board, the financial convenience for rural areas and farmers will also drop a lot.
Anyway, give it some time.
