01
Since October 18, 2022, several rural banks in Henan have been in the process of "system upgrade". As of now, more than two months have passed, but these rural banks have not yet restored their online withdrawal function.
However, judging from the relevant information released by the police in recent times, this matter is not a simple system upgrade, but involves a third-party institution, namely Xin Fortune Group. Xin Fortune Group controls these village banks through indirect control, and then uses these village banks to illegally absorb deposits from netizens across the country online. The cumulative number of people involved exceeds 400,000, and the amount involved is close to 40 billion.
Nearly 40 billion yuan of funds are likely to be used by Xinfu Group through various affiliated companies for various purposes, and some of the funds have formed bad debts at present.
02
After seeing problems with these rural banks in Henan, it is estimated that other netizens across the country are worried about the deposit security of rural banks.
Rural and town banks are currently the largest number of legal entities in my country.
According to the data released by Central Bank , as of the end of 2021, the number of legal entities in rural banks in my country reached 1,649. These rural banks are distributed in all over the country. They have contributed important strength to the development of my country's county economy and are one of the important participants in rural finance in my country.
However, compared with large banks, these rural banks are relatively small in scale and have fewer outlets. What’s more important is that the equity of these rural banks is relatively scattered.
Although according to the requirements of the regulatory authorities, the establishment of village banks is very strict. On the one hand, a large financial institution must be the initiator, and on the other hand, there must be a complete management system. On the other hand, senior management personnel must meet the corresponding qualifications for their posts, and the qualifications for senior management personnel must be approved by the regulatory authorities to be competent.
But At present, many rural banks meet various regulatory requirements on the surface during the setting up process, but there may be indirect holdings, individual holdings, and forming joint actors behind them.
Some companies achieve the goal of actually controlling rural banks through indirect holding shares. For example, several rural banks in Henan that encountered difficulties in withdrawing cash during this period were controlled by Xin Fortune Group, which caused great risks to the operation of these rural banks.
03
According to the data released by the regulatory authorities, in addition to the village banks that have problems in Henan, there are actually many village banks that currently have certain risks.
According to the rating results of the 2021 fourth quarter financial institutions announced by the central bank in March this year, the corresponding risk levels of different types of financial institutions in my country are as follows.
This risk rating is carried out once a quarter, with the rating levels divided into 11 levels, 1 to 10 and D respectively. The larger the level value indicates the higher the risk of the institution. Among them, D indicates that the institution has gone bankrupt, taken over or revoked. Institutions with rating results of 8 to 10 and D are listed as high-risk institutions.
Judging from the results of the central bank's rating, most banks in my country have very high security levels, and most banks have risk levels below level 7.
Among them, the number of banking legal entities with ratings of 1 to 7 is 4082, accounting for 92.815%; there are 316 with ratings of 8 to D, accounting for 7.185%.
Among the number of financial institutions with ratings above level 8, including 91 in Level 8, 157 in Level 9, 64 in Level 10, and 4 in Level D.
Among these risky banking institutions, the highest risk ratio is rural cooperative institutions ( rural commercial banks, credit cooperatives, rural cooperative banks) and rural banks. The number of high-risk institutions in these two types of banks reaches 186 and 103 respectively, and assets account for 5% and 7% of the institutions of this type of institutions respectively.
However, as for which bank is a high-risk institution, the central bank has not clearly listed it. This may be to maintain market stability.
04
The high-risk ratio of these rural banks and rural cooperative institutions is relatively high, I think it is mainly related to the blind expansion of these banks in recent years.
In recent years, many banks have continuously expanded their deposit scale in order to pursue scale growth one-sidedly. Some banks even do not need to illegally absorb deposits across regions, such as absorbing deposits from all over the country through online channels, which is obviously not in line with the positioning of these banks themselves.
For example, the positioning of rural banks mainly serves local small and medium-sized enterprises and local rural economies, and can only absorb deposits in limited areas.
However, in recent years, some village and town banks have unilaterally pursued scale growth and then absorbed deposits across regions.
The biggest weapon for these small banks to absorb deposits is that the deposit interest rates are obviously much higher than those in the market. For example, in the past few years, most banks' deposit interest rates did not exceed 4%.
However, some small banks can give more than 4% for one-year interest rates, and even more than 5.4% for a five-year interest rate. This approach has attracted many deposit customers.
After the deposit scale expands, their lending threshold will be lowered accordingly. This practice will not have any problems when the overall economic environment is relatively good. Even if bad debts occur, it will not cause too much risk.
However, once the overall environment changes and the business conditions of the company are not ideal, bad debts may occur. In this way, risks will arise on the asset side, which will affect the solvency of the liability side. If the situation worsens, it may even lead to the inability to withdraw the user's deposits normally, just like these rural banks in Henan.
05
So in the deposit process, everyone must be careful. At any time, you must not have both fish and bear's paw. Although the deposit interest rates given by these rural banks are very attractive, once risks arise, it may cause great trouble.
Although these rural banks are also formal financial institutions in my country and are protected by Deposit Insurance Regulations , the regular deposits of customers will not have any risks, and they can get back the principal and interest within 500,000 yuan.
But if a village bank has deteriorated due to poor management, the deposit may be delayed. Although can eventually be brought back 100%, if the deposit is delayed, it will also be under great pressure for everyone.
So in order to avoid some unnecessary troubles, if you have low risk tolerance and don’t want any exogenous things, it is recommended that you choose those big banks when depositing.
Judging from the bank risk rating results released by the central bank, the risks of large banks are relatively low. Among them, 6 of state-owned commercial banks, and 12 joint-stock banks, are all within level 7, which shows that the operations of these large banks are very safe.
Although the deposit interest rates given by these large banks are relatively low, especially in the current context of high liquidity, the deposit interest rates of these large banks will basically not exceed 3.6%, deposits are very safe.
Of course, although there are currently some village and town banks with relatively high risk levels, it does not mean that other village and town banks in the country have problems. Overall, village and town banks in my country are still very safe at present.
And compared with large banks, the deposit interest rate of rural banks is indeed relatively high. If you choose suitable rural banks, such as rural banks, such as rural banks themselves, have very healthy business aspects, reasonable equity structure, and complete management systems, then deposits in these rural banks are actually very safe. The key is how you identify and choose.
