The Chinese banking authorities have issued the first of a new type of rural banking license to one of the leading financial institutions in Jiangsu province.
On 8 April Changshu Rural Commercial Bank (常熟银行) announced that it had received the “Approval Concerning Preparations to Establish Xingfu Rural Bank Share Limited Company” (关于筹建兴福村镇银行股份有限公司的批复) from the China Banking and Insurance Regulatory Commission (CBIRC) on 4 April.
The approval gives Changshu Rural permission to establish Xingfu Rural Bank (兴福村镇银行股份有限公司), under a new license which categorises it as an “investment management-type rural bank” (投资管理型村镇银行).
The license gives the financial institution the right to acquire and take over other rural banks situated throughout all of China, providing Xingfu Village Rural Bank with unprecedented scope to expand its operations around the country.
There are currently over 1500 rural banks in operation throughout China.
Domestic analysts say that in practical terms this means that Xingfu Rural will take over ownership and responsibility from Changshu Rural for the management of the large number of rural banks that it currently controls.
Changshu Rural currently runs around 30 rural banks situated across the four provinces of Hubei, Jiangsu, Henan and Yunnan, all of which fall under its “Xingfu Rural” banking brand, including Enshi Xingfu Rural Bank (恩施兴福村镇银行) and Changzhou Jintan Xingfu Rural Bank (常州金坛兴福村镇银).
Changshu Rural first announced on 17 December 2018 that it planned to establish an investment management-model rural bank with registered capital of up to 1.5 billion yuan and no less than 1 billion yuan.