Despite different equity forms, rural cooperative financial institutions must faithfully serve the agricultural industry, the countryside and farmers, said Jiang Dingzhi, deputy chairman of the China Banking Regulatory Commission.

When Jiang was investigating Beijing Rural Commercial Bank, he emphasized that rural cooperative financial institutions should optimize equity structure, increase corporate governance, change operating mechanism, and improve managing level to comply with the modern financial enterprise system.

Jiang said that boosting rural development should be the focus of rural cooperative financial institutions. China must diversify its banking industry, having banks with specific financial products and services to suit various customers' needs, he added.

According to Jiang, at present, rural cooperative financial institutions face problems like high operating costs and risks but small profit margins in the under-developed Chinese rural areas.

Against such a backdrop, the institutions have to sharpen competitive edge through improving their overall strength. Besides gaining policy support from the central and local governments, these banks have to make independent innovations, said Jiang.

(China Daily July 17, 2007)