China's village banks fall below 1,000 as 183 exit this year

Recent regulatory approvals have seen multiple village banks acquired or dissolved, marking a continued trend of consolidation in China's rural banking sector.

According to data compiled by Nandu Financial News from the National Financial Regulatory Administration (NFRA) official website, at least 20 village banks have been approved for dissolution or acquisition since September. So far this year, a total of 183 village banks have exited the market. Some major banks, including China Everbright Bank, Shanghai Pudong Development Bank, and China Evergrowing Bank, have already reduced their village bank subsidiaries to zero.

As of now, the number of village banks in China has fallen to 986.

Multiple Minsheng Village Banks Acquired

Recently, several Minsheng-village banks have been "absorbed" by their parent bank. The Chizhou Financial Regulatory Sub-Bureau issued an approval allowing Minsheng Bank to acquire Chizhou Guichi Minsheng Village Bank, taking over its assets, liabilities, business, and employees, and establishing branches. Similarly, the Yulin Financial Regulatory Sub-Bureau approved Minsheng Bank's acquisition of Yulin Yuyang Minsheng Village Bank, and the Yan'an Financial Regulatory Sub-Bureau approved the acquisition of Zhidan Minsheng Village Bank.

In addition, several other Minsheng-village banks—including Cixi Minsheng Village Bank, Xiamen Xiang'an Minsheng Village Bank, and Funing Minsheng Village Bank—have been formally approved for dissolution after earlier acquisition approvals, completing the final procedural step. According to the NFRA website, 16 Minsheng-village banks remain in operation.

Shanghai Rural Commercial Bank has also acquired one of its village bank subsidiaries. The Shanghai Financial Regulatory Bureau approved the merger of Shanghai Chongming Hu Rural Commercial Bank into Shanghai Rural Commercial Bank, with the latter assuming all assets, liabilities, institutions, business, employees, and other rights and obligations after asset verification.

Geographic Distribution of Remaining Village Banks

Data from the NFRA's "Financial License" section shows that the total number of village bank headquarters in China now stands at 986, below the 1,000 mark. Provinces with relatively high numbers include Henan, Shanxi, Guizhou, Shandong, Hebei, Zhejiang, Anhui, Jiangxi, and Yunnan, each with 50 or more. Fujian, Jiangsu, Guangdong, Sichuan, Shaanxi, Hubei, and Guangxi each have between 30 and 50. In contrast, Tibet, Hainan, Inner Mongolia, and Beijing have only single-digit numbers of village banks.

"15th Five-Year Plan" to Continue Reducing and Improving Small and Medium Financial Institutions

China's village banks began operations in 2007, marking nearly 20 years of development. Initially positioned to "serve counties, support villages, and aid agriculture and small businesses," they filled gaps in rural financial services and became an important force in inclusive finance.

However, rapid expansion exposed problems. Some institutions expanded blindly, deviating from their core mission. Others suffered from weak capital bases and poor risk resilience, while governance deficiencies and irregular shareholder behavior also emerged.

In recent years, financial regulators have pushed for "reform and restructuring" and "reduction with quality improvement" of village banks. According to NFRA data, only a single-digit number of village banks exited in 2022 and 2023. That number surged to 83 in 2024. In 2025, a record 310 village banks disappeared. Although the pace of reduction has slowed this year, it remains high, with roughly one village bank disappearing every day and a half.

At a press conference on September 10, NFRA Deputy Director Cong Lin reiterated that during the "15th Five-Year Plan" period, the authority will "forcefully, orderly, and effectively prevent and resolve risks in local small and medium financial institutions, firmly hold the bottom line of no 'explosions,' and promote reduction with quality improvement and optimized layout."

From their emergence to fill rural financial gaps, through risk exposure and struggle for survival, to the current phase of consolidation and deep restructuring, China's village banks have experienced a turbulent 20 years. Industry insiders believe that through this round of mergers, restructuring, and deep transformation, village banks are gradually integrating into a more stable financial system.

Reporting by Nandu Financial News reporter Liu Lanlan Produced by Nandu Finance and Industry News Department