In recent days, the Inner Mongolia Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued a reply on the dissolution of Zhenglanqi Huize Village Bank. As of June 21, at least 40 rural small and medium-sized banks in mainland China have been absorbed, merged, or dissolved, accelerating the reshuffle of rural small and medium-sized banks. Last year, there were 77 fewer financial institutions in the banking industry in mainland China.
On June 21, according to the regulatory authorities of the Chinese Communist Party, following the acquisition of Zhenglanqi Huize Village Bank by Ordos Bank, the Zhenglanqi Huize Village Bank was dissolved. All of the latter’s business, assets, rights and obligations, and other rights and obligations were legally succeeded by Ordos Bank. By then, the number of rural small and medium-sized banks approved for absorption, merger, or dissolution in 7 days had increased to 40, including 25 rural commercial banks and 15 village banks.
Similar to Zhenglanqi Huize Village Bank, in the recent period, several rural small and medium-sized banks have been acquired or consolidated into larger banks in terms of regional asset size and business volume.
According to Securities Times, Liaoning Rural Commercial Bank received approval to absorb and merge 36 rural small and medium-sized bank institutions; Minsheng Bank acquired a village bank and established a branch; Dongguan Rural Commercial Bank absorbed and merged 2 village banks.
On June 14, Minsheng Bank announced that the National Financial Regulatory Commission approved its acquisition of Meixian Minsheng Village Bank and the establishment of the China Minsheng Bank Meixian Branch.
In addition to the “village-to-branch” model, the country’s first case of a rural commercial bank being approved to absorb and merge a village bank and convert it into a branch also emerged within 7 days. On June 20, the Guangdong Regulatory Bureau of the China Banking and Insurance Regulatory Commission approved Dongguan Rural Commercial Bank to absorb and merge Huizhou Zhongkai Dongying Village Bank and Dongguan Dalang Dongying Village Bank. This is also the first case of a rural commercial bank absorbing and merging village banks in Guangdong Province.
Recently, Liaoning Rural Commercial Bank, which has been operating for less than a year, was approved to absorb and merge 36 rural small and medium-sized bank institutions in Liaoning such as Xinmin Rural Commercial Bank, and take over the effective assets, total liabilities, business, network points, and staff of these institutions after clearing and capital verification.
Liaoning Rural Commercial Bank’s large-scale merger and expansion have attracted attention in the industry.
According to reports, based on the list of legal entities of banking and financial institutions recently disclosed by the National Financial Regulatory Commission, at the end of 2023, there were 4490 legal entities in the Chinese banking and financial institutions. Compared to 4567 in 2022 and 4602 in 2021, the number of legal entities in banking and financial institutions has been reduced for two consecutive years, with a decrease of 77 in 2023.
Industry insiders predict that by the end of 2024, the list of independent legal entities of banking and financial institutions will further shrink, with “rural small commercial banks and village banks still accounting for the majority.”
According to incomplete statistics, since the beginning of this year, as of June 21, more than 20 village banks approved for acquisition by regulatory authorities, and over 10 village banks converted through the “village-to-branch” or “village-to-sub-branch” model.