ABSTRACT
Financial institutions within the RCC system (RCC institutions) are the ones with the largest number and the widest coverage in China. They include three types of financial institutions, i.e., rural commercial banks, rural cooperative banks and rural credit cooperatives. With a reform introduced by the China Banking and Insurance Regulatory Commission in 2010, all rural cooperative banks and rural credit cooperatives were transformed into shareholding entities without any element of a cooperative system, which implies that all of the RCC institutions are now shareholding entities without any element of a cooperative system, no matter whether their names are coined with “cooperative”. The RCC institutions are the main force of the current rural financial market and play an important role in supporting rural revitalization and agricultural and rural modernization. In comparison with 2003, the beginning year of the RCC reform, the business operations and asset conditions of the RCC institutions improved significantly in general. However, these financial institutions still face big challenges in their business operations and development. There are still a series of problems relating to their ownership and governance, and some are vulnerable and also face severe financial risks. This paper expounds the above problems and analyzes their background and origins. Finally, this paper puts forward some policy suggestions to further promote the institutional and financial sustainability of these financial institutions.
