China's village banks fall below 1,000, with 183 exiting this year

Recent regulatory approvals have seen multiple village banks, including Shanghai Chongming Hu-Nong-Shang Village Bank and several Minsheng Bank-affiliated village banks, being acquired by their parent institutions. 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, 183 village banks have exited the market. Some banks, such as China Everbright Bank, Shanghai Pudong Development Bank, and Evergrowing Bank, have already "cleared" their village bank subsidiaries. As of now, the total number of village banks in China has dropped to 986.

Village Banks Fall Below 1,000

Recently, several Minsheng Bank-affiliated village banks have been "absorbed." 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, both with branch establishment.

In addition, several other Minsheng-affiliated 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-affiliated 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-Nong-Shang Village Bank into Shanghai Rural Commercial Bank, with the latter assuming all assets, liabilities, institutions, business, employees, and other rights and obligations after asset verification.

Based on NFRA approvals, Nandu Financial News reports that at least 20 village banks have been approved for dissolution or acquisition since September. In total, 183 village banks have exited the market this year. Some banks, including China Everbright Bank, Shanghai Pudong Development Bank, and Evergrowing Bank, have fully divested their village bank holdings.

According to the "Financial License" section of the NFRA website, the total number of village bank headquarters in China now stands at 986, below 1,000. Geographically, provinces such as Henan, Shanxi, Guizhou, Shandong, Hebei, Zhejiang, Anhui, Jiangxi, and Yunnan have relatively high numbers of village banks, each with 50 or more. Fujian, Jiangsu, Guangdong, Sichuan, Shaanxi, Hubei, and Guangxi have fewer than 50 but at least 30. In contrast, Tibet, Hainan, Inner Mongolia, and Beijing have single-digit numbers of village banks.

Current distribution of village banks in China. Source: NFRA official website.

"15th Five-Year Plan" to Continue Promoting Reduction and Quality Improvement of Small and Medium Financial Institutions

China's village banks began operations in 2007, marking nearly 20 years of development. With a positioning of "rooted in counties, serving villages, supporting agriculture and small businesses," they filled gaps in rural financial services and became an important force in inclusive finance.

However, rapid expansion exposed a series of problems. Some institutions expanded blindly, deviating from their "supporting agriculture and small businesses" mission. Others had weak capital strength and poor risk resilience, allowing risks to grow. Still others faced governance deficiencies and irregular shareholder behavior.

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

Village bank exits in recent years. Source: NFRA official website.

At a press conference on September 10, 2025, held by the State Council Information Office on the "15th Five-Year Plan," NFRA Deputy Director Cong Lin reiterated that during the "15th Five-Year Plan" period, efforts will focus on effectively preventing and resolving risks in local small and medium financial institutions, firmly holding the line against "explosions." The goal is to promote reduction and quality improvement, as well as optimize the layout of these institutions.

From their emergence to fill rural financial gaps, through risk exposure and struggle for survival, to the current phase of reduction, quality improvement, 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

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