China's banking regulators on Monday further eased market
access for banks to rural areas and removed some obstacles to the
development of rural financial services, in a move to promote the
rural development.
All banking institutions are allowed access to rural areas,
according to a new guideline, published on the website of the China
Banking Regulatory Commission (CBRC). The commission aims to
provide more sophisticated and tailored loan services for rural
communities and businesses.
Six provincial areas had previously been included in a pilot
program to allow foreign and domestic banking capital to invest in,
purchase or establish banking institutions in rural areas,
according to an earlier guideline issued at the end of 2006.
The new guideline directs loans to the agricultural production
sector, and other sectors such as the processing of farm produce
and transportation in a bid to support the industrial development
in rural areas.
The guideline also encourages loans to farmers to buy expensive
durable consumer products, finance the construction or purchase of
homes, and cover medicare costs as well as school tuition for farm
children. In the past farmers found these kinds of loans difficult
to obtain.
The CBRC raised the maximum for micro loans offered to rural
people and industry in developed areas?to between?100,000
yuan?and 300,000 yuan, and to between 10,000?and 50,000
yuan for those in underdeveloped areas.
The commission also said that the terms of village
loan?would be flexible. For example, the loan payment terms
could be fixed according to the agricultural production cycle.
The policy again called on the financial institutions in rural
areas to simplify loan application procedures for farmers and rural
industry.
The government pledged to accelerate financial reform in rural
areas in its annual report made in March.
After the government lowered the working capital limits for
domestic financial institutions to establish branches in rural
areas to three million yuan (US$384,615) for banks in counties and
one million yuan in villages and towns in terms of registered
capital, a few village banks were established in pilot areas this
year.
The Postal Savings Bank, which opened for business on March 20
as the country's fifth largest bank, was expected to give a lift to
credit services in rural areas. Sixty percent of its outlets are
located in rural areas.
(Xinhua News Agency August 7, 2007)
