How to improve the liquidity of rural banks

rural banks have played an active role in improving the coverage of financial institutions in rural areas and solving the problems of insufficient financial supply and insufficient competition, but they have also encountered many problems in their operation, among which the problem of insufficient liquidity and instability is the most prominent, and the liquidity risk is therefore prominent. For the liquidity risk management of rural banks, the author has the following thoughts. One of the causes of liquidity risk: insufficient liquidity. The lack of liquidity stems from the weak ability of rural banks to obtain cash through debt. As a new rural financial institution, rural banks have low social awareness in the early stage of development, and the public generally think that rural banks are private banks, and they are unwilling to keep money. In addition, at present, the settlement channels of village banks are not smooth, and they can't join the large and small payment settlement system of the People's Bank of China as direct participants. Remittance in different places can only be carried out through correspondent banks, and the remittance money can't be received in real time, which makes the settlement of enterprises very inconvenient, making county enterprises reluctant to open accounts in village banks, and it is difficult for village banks to obtain stable corporate deposits. It is recommended to read Bank Weekly:

The card-swiping rate is brewing to lower the payment industry or meet the cold winter. Eight star stories of the banking industry in 211 reported that 8 trillion yuan of new credit was added in 212, and the expected income of wealth management products in the industry exceeded 5% across the board. The card-swiping rate of bank cards is brewing to lower the interest rate marketization or make the bank earn less than half. The retired aunt entrusted the credit card to be cheated by 47, yuan and the credit card channel of Xunwang was officially launched. The second cause of liquidity risk is poor liquidity. The assets of rural banks are mainly credit assets. Because the business of agriculture, rural areas and farmers is greatly influenced by natural factors, the production cycle of planting and aquaculture is long, which determines that the loan period is more than one year, and the ability to realize assets quickly is poor. Natural disasters directly aggravate the loan risk. In the case that the compensation mechanism for agricultural loans is basically absent at this stage, the delay or non-recovery of loans will lead to the failure to realize assets in time. As the number of high-risk borrowers increases, the probability that customers' liquidity risk will be transferred to banks will increase accordingly. The third inducement of liquidity risk: lack of management. At present, rural banks lack theoretical guidance, practical experience, proactive stress testing and their own liquidity risk management early warning and crisis response system. Under the dual pressure of low social awareness and poor settlement and remittance channels of rural banks at this stage, new customer deposits, as the most important source of liquidity funds, are generally insufficient and have a considerable degree of uncertainty, while loans, as liquid assets, are relatively certain, which leads to a big gap between liquidity supply and liquidity demand of rural banks' three rural businesses, and the uncertainty of deposits and the certainty of loans. Based on the above analysis, rural banks should improve their liquidity from the following six aspects. Increase stable deposits and maintain a reasonable debt structure. If excessive pursuit of profit maximization, short-term low-cost deposits are undoubtedly the first choice. However, in order to adapt to the long business cycle of agriculture and upstream and downstream enterprises, rural banks, which take serving agriculture, rural areas and farmers as their responsibility, need more stable deposits to support their loan demand for more than one year. Therefore, rural banks should vigorously market relatively stable savings deposits for more than one year. Because fiscal deposits are budget management and earmarked, there is a process from application to approval when they are used, and they can generally be kept in the books for a long time, which should also be the marketing focus of rural banks. At present, the subsidies for supporting agriculture and benefiting farmers in the county are generally distributed by different agent banks designated by the financial department on a county basis. Village banks with outlets in counties and towns should actively coordinate with local governments and strive to issue subsidies for supporting agriculture and benefiting farmers as agents, so as to facilitate local people and obtain relatively stable sources of deposits. Reasonably determine the loan structure. In the initial stage of development, it is generally difficult for rural banks to restrain the "impulse" of lending. When the total amount of deposits is insufficient, the loan scale grows too fast, which is reflected in the figures that loan-to-deposit ratio exceeds the standard. Although China Banking Regulatory Commission requires rural banks to gradually meet the standards in loan-to-deposit ratio within a certain period after opening, they can't blindly expand their asset business regardless of the source of deposits. Improve the liquidity of assets. The ratio of medium and long-term deposits and loans should be kept below 1% as far as possible, that is, the ratio of the balance of medium and long-term loans over one year to the balance of medium and long-term deposits over one year should be kept below 1%. If it exceeds 1%, it means short-term deposits and long-term loans, and the structure is unbalanced, which will increase the liquidity risk. Appropriately borrow funds. Borrowing money is a short-term adjustment fund, which is an emergency need. However, at this stage, it is common for rural banks to improperly use borrowed funds to lend or use borrowed funds to lend in disguise. The central bank stipulates that the ratio of borrowed funds (that is, the ratio of the balance of borrowed funds to the balance of various deposits) of commercial banks shall not be higher than 4%, and the ratio of borrowed funds (that is, the ratio of the balance of borrowed funds to the balance of various deposits) shall not be higher than 8%. Excessive borrowing or lending will increase the operational risk of rural banks, and then affect their ability to pay. Compared with ordinary depositors' runs on banks, financial institutions as creditors' runs on banks are not only more impactful, but also faster, because they can obtain information more easily. Establish a scientific and practical liquidity monitoring index system. Quantitative indicators should include: loan-to-deposit ratio, liquidity coverage ratio, liquidity gap rate, the proportion of the top ten loan customers, the proportion of medium and long-term loans, etc. Qualitative indicators should mainly consider the composition, changing trend and stability of capital sources and the ability to allocate capital positions. These indicators are widely used in the liquidity risk management of commercial banks, and rural banks can determine a reasonable liquidity risk warning value according to their own operating characteristics. Once these indicators approach the warning line, the management should make timely decisions to ensure liquidity safety. Disclaimer This article only represents the author's own views and has nothing to do with Hexun. Hexun.com is neutral about the statements and opinions in this article, and does not provide any express or implied guarantee for the accuracy, reliability or completeness of the contents. Readers are requested for reference only, and please take full responsibility.