Rural credit cooperatives given greater rights

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Last updated at: (Beijing Time) Wednesday, November 26, 2003

Rural credit cooperatives given greater rights

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A senior Chinese banking official has urged provincial governments not to have controlling shares in rural credit cooperatives or interfere in their internal affairs, in an effort to turn them into independent entities responsible for their own profits and losses.

Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), a newly-established government watchdog on the banking industry, made the call at the closing ceremony of the first training course for senior supervisors in the field of cooperative finance Monday.

Since August, China has launched a pilot reform scheme on rural credit cooperatives in eight provinces. One of the main targets is to transfer these cooperatives from the hands of the CBRC to the hands of provincial governments.

The provincial governments should play a vital role in creatinga sound environment for rural credit cooperatives, safeguarding the market order, cracking down on debt evaders, providing information and helping reduce financial risks, said Liu.

Provincial departments in charge of rural cooperatives should play a role of watching the activities of rural credit cooperatives in accordance with state law and policies.

As of late June, China had 34,909 rural credit cooperatives at different levels, with 32,397 credit cooperatives at the grassroots level and the rest at county, city and provincial levels.

The outstanding deposits totaled 2.233 trillion yuan (around 269 billion US dollars), accounting for 11.5 percent of the total deposits in financial institutions and outstanding loans totaled 1.618 trillion (around 195 billion US dollars), accounting for 10.8 percent of the total.

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