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On August 19, the Financial Regulatory Administration announced four approvals, all of which involved the reform and risk mitigation of rural small and medium-sized banks.

One of the replies indicated that the bank agreed to merge the Zanhuang Longxing Village Bank with the Hebei Zhengding Rural Commercial Bank, and after the merger, the bank would inherit the village bank's claims and debts. The reply required that the Hebei Zhengding Rural Commercial Bank should strictly follow the relevant laws and regulations to handle the merger preparations, and urge the Zanhuang Longxing Village Bank to complete the dissolution of the legal entity.

Public information shows that Hebei Zhengding Rural Commercial Bank is the main sponsor of Zanhuang Longxing Village Bank. Since the beginning of this year, more than 50 rural small and medium-sized banks have been dissolved, most of which point to the dissolution of village banks due to mergers and acquisitions, especially cases of village banks being converted into branches and sub-branches after being absorbed and merged by the main sponsor bank, which have been reported repeatedly in the newspapers.

Another approval also involves the absorption and merger of village banks, but it is not the main sponsor bank absorbing and merging its village banks, but the less common village banks absorbing and merging village banks.

The reply pointed out that it agreed to Chengde County Hengsheng Rural Bank to absorb and merge Pingquan Hengsheng Rural Bank, and take over the latter's assets, liabilities, business and employees. Chengde County Hengsheng Rural Bank should strictly follow the relevant laws and regulations to handle the preparations for the absorption and merger, and urge Pingquan Hengsheng Rural Bank to complete the relevant matters of dissolution.

Public information shows that the major shareholders of the above two village banks are Zhejiang Wenzhou Ouhai Rural Commercial Bank. In December last year, Shijiazhuang Xinhua Hengsheng Village Bank, a subsidiary of Zhejiang Wenzhou Ouhai Rural Commercial Bank, was approved to absorb and merge Gaocheng Hengsheng Village Bank and Jinzhou Hengsheng Village Bank, and changed its name to Shijiazhuang Hengsheng Village Bank. At the same time, eight branches of Shijiazhuang Hengsheng Village Bank, including Gaocheng Branch, Zhangjiazhuang Branch, Qiutou Branch, Zhujiazhuang Branch, Guangming Branch, Zongshizhuang Branch, Mayu Branch, and Huaishu Branch, were approved to open.

The other two approvals show that the equity transfer applications of Luquan Hengsheng Rural Bank and Zhengding Hengsheng Rural Bank were approved. After the equity transfer was completed, the proportion of shares held by Zhejiang Wenzhou Ouhai Rural Commercial Bank in these two rural banks changed from 40% to 100%.

The Financial Times reporter noted that in recent years, many main sponsors have increased their holdings of village banks to consolidate their role as the "first responsible person" and promote the reform and development of village banks. Take Zhejiang Wenzhou Ouhai Rural Commercial Bank, which is involved in the approval, as an example. The bank's request to increase its holdings in village banks has been approved many times. Previously, its shareholding ratio in Pingquan Hengsheng Village Bank and Chengde County Hengsheng Village Bank has also increased to 100%.