Source: China's financial landscape has entered a new phase with the dual approach of restructuring provincial rural commercial banks and the grassroots integration of state-owned banks.

In just the past month, the Agricultural Bank of China (ABC) has been approved to integrate 192 branches previously belonging to rural commercial banks, rural credit cooperatives, and village banks. This move marks a significant step for state-owned banks in participating in the integration of local financial resources and enhancing institutional stability.

Since the beginning of 2025, state-owned banks like ABC, Industrial and Commercial Bank of China (ICBC), and Bank of Communications have engaged in the reform of rural credit systems through strategies such as "village to branch" transformations, complete equity control, and institutional acquisitions. This has led to a new model of agricultural credit reform.

Moreover, provincial-level reforms are also advancing rapidly. Since the initiation of the new round of provincial cooperative reform in 2022, several provinces, including Zhejiang, Liaoning, Henan, and Shanxi, have implemented their rural credit reform plans.

Before this large-scale integration of rural credit institutions in Jilin, Jilin Rural Commercial Bank and 13 of its branches were granted permission to commence operations at the end of August 2025, laying the groundwork for a unified legal entity in the province's rural credit system.

ABC’s ambitious integration of 192 branches took place swiftly, with a series of name changes approved on October 12 by the National Financial Regulatory Administration’s Yanbian office. Institutions under Yanbian Rural Commercial Bank, Jilin Longjing Rural Commercial Bank, and Jilin Dunhua Rural Commercial Bank were renamed to "ABC XX Branch" or "ABC XX Sub-branch."

Notably, on September 26, the Baishan Financial Regulatory Bureau approved 12 branches of Baishan Jiangyuan Rural Commercial Bank to change their names to ABC branches. Similarly, on the same day, the Songyuan Regulatory Bureau approved the renaming of three branches of Yanbian Rural Commercial Bank and 19 operational institutions under Qian'an Rural Credit Cooperative to ABC branches or sub-branches.

By September 29, the Jilin Financial Regulatory Bureau had approved the name changes of 57 branches under Changchun Development Rural Commercial Bank to ABC branches.

These name changes reflect a steady advancement in the reform of local rural credit systems, marking an important step in integrating regional financial resources and enhancing institutional stability.

Since the launch of the new round of provincial cooperative reform in 2022, various regions have actively restructured their provincial rural commercial systems, forming provincial rural commercial banks or cooperative banks. As of now, provinces like Zhejiang, Liaoning, Henan, Shanxi, Sichuan, Guangxi, Hainan, Jiangsu, Jiangxi, Inner Mongolia, and Jilin have successfully implemented rural credit reform programs.

In the first half of 2025 alone, new rural commercial banks in Henan, Jiangsu, and Inner Mongolia have opened or been approved to start operations.

Just before ABC's major involvement in integrating several rural commercial branches in Jilin, the Jilin Rural Commercial Bank and its 13 branches were approved for operations in late August 2025.

Jilin Rural Commercial Bank was formed through a merger of Changchun Rural Commercial Bank, Siping Urban Association, Ningjiang District Association, and other 13 legal entities, gradually integrating other rural commercial banks and newly established local village banks to create a unified provincial legal entity.

"Village to branch" reforms are the primary path for state-owned banks' involvement in this round of systemic reform.

State-owned banks have played a crucial role in the current rural credit system reform, with "village to branch" transformations being the main method for their participation.

According to approval granted by the National Financial Regulatory Administration, on June 23, 2025, the ICBC was authorized to acquire Chongqing Bishan Gongyin Village Bank and establish the Central Avenue Branch, taking on assets, liabilities, operations, and employees after the bank's asset verification.

In August 2025, the Sichuan Financial Regulatory Bureau approved the Bank of Communications' acquisition of a 2.71% stake in Dayi Jiaoyin Xingmin Village Bank, increasing its stake to 100% and achieving complete control.

In September 2025, the Xiamen Financial Regulatory Bureau approved ABC's acquisition of Xiamen Tong'an Nongyin Village Bank and the establishment of the ABC Xiamen Datong Branch, assuming all assets, liabilities, operations, and staff.

On October 9, 2025, the Jinhua office of the National Financial Regulatory Administration consented to ABC’s acquisition of Zhejiang Yongkang Nongyin Village Bank and the formation of three new branches, absorbing all operations from the acquired bank.

As of the end of June 2025, ABC had 22,900 branches nationwide, including 410 secondary branches, 3,313 first-level branches, and 19,200 grassroots business institutions. The bank also controls six village banks, including Hubei Hanchuan Nongyin Village Bank and others.

ICBC controls two village banks, and the Bank of Communications oversees four village banks, demonstrating the "strong merging with weak" and "large guiding small" principle as a core logic in the current risk resolution and system reconstruction.

Analysts suggest that state-owned banks are shifting from traditional equity guidance to deeper equity control, institutional takeover, and resource integration, gradually creating a multi-level, systematic participation pathway. This approach allows for rapid expansion of service networks and stabilization of regional financial order while fundamentally transforming weaker institutions through full ownership and institutional reforms, addressing governance flaws and risk vulnerabilities.

Data indicates that since 2025, over 300 small and medium-sized banks have been dissolved, merged, or deregistered. As of the end of June 2025, the number of rural banks in China stood at 1,440, representing a net decrease of 98 banks compared to the end of 2024.

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