In recent years, China’s economy has been continuously declining, leading various industries to streamline their operations to cope with the crisis. Within the first hundred days of 2026, 72 rural banks have completed their withdrawal and cancellation, compared to 27 during the same period last year, marking a staggering 167% increase. Industry insiders point out that rural banks are a concentrated reflection of the deteriorating economic environment and the fragility of the financial system.
According to a report by the Securities Times on April 21, a recent case of “village merging village” has emerged in Tianjin. Tianjin Huaming Rural Bank absorbed and merged with Tianjin Ninghe Rural Bank, transforming the latter into a branch, both initiated by Shandong Shouguang Rural Commercial Bank.
At the beginning of 2026, six rural banks, including Chongqing Yunyang Hengfeng Rural Bank, Nanjiang Nongke Rural Bank, Hunan Hengshan Tanzhongshang Nongshang Rural Bank, and Chaoyang Liucheng Rural Bank, completed their withdrawals and cancellations.
Data from the China Banking and Insurance Regulatory Commission shows that as of April 20, 72 rural banks have completed their withdrawal and cancellation since the beginning of 2026, showing a faster growth compared to the 27 during the same period last year.
Previous data from the commission reported that in 2025, a total of 226 rural banks completed their withdrawal and cancellation, while in 2024, 2023, and 2022, the numbers were 83, 9, and 8, respectively.
As cases of “village merging village,” “village transforming branches,” and “village transforming support” continue to surface, many banks, including state-owned and joint-stock banks, are accelerating their absorption of rural banks under their umbrella to quickly resolve risks associated with small and medium-sized financial institutions. Some banks have already achieved a “zero” quantity of rural bank establishments.
In late January of this year, Bank of Communications received approval to acquire the Xinjiang Shihezi Bank of Communications Rural Bank. This was the last rural bank established by Bank of Communications to be acquired, indicating that Bank of Communications has completely cleared its rural bank portfolio.
On April 15, the Chongqing Banking Regulatory Bureau approved the acquisition of Tongnan Minsheng Rural Bank by
Minsheng Bank
and the establishment of a branch, making it the third rural bank acquired by Minsheng Bank since the beginning of the year.
According to a report by “21st Century Economic Herald,” at the beginning of 2026, joint-stock banks have been accelerating the integration and withdrawal of their rural banks, with the wave of “branch transforming support” sweeping through the domain of joint-stock banks.
By the end of January this year, Everbright Bank rapidly completed the withdrawal of its three rural banks within three months, achieving a comprehensive “zero” for its existing institutions. Meanwhile, Shanghai Pudong Development Bank has been intensively promoting integration through the “village transforming support” mode, with two of its rural banks withdrawing consecutively on February 5th and 6th, making it the institution with the most frequent recent exits among joint-stock banks.
In 2025, the Chinese Communist Party’s regulatory authorities listed “accelerating the reform and risk reduction of small and medium-sized financial institutions” as the top priority for the year, with “mergers and reorganizations” becoming the central path.
Industry insiders believe that the withdrawal of rural banks is not simply a reduction in numbers but a concentrated reflection of the deteriorating economic environment and the fragility of the financial system. While mergers and reorganizations can temporarily alleviate risks for some institutions, the process involves complex elements such as equity transfers and institutional optimization, posing significant operational challenges.