China Eliminates Hundreds of Rural Banks as Bad Loans Weigh on Small Lenders
China’s rural banks are disappearing as independent institutions amid high bad-loan levels and a government push to reduce and restructure smaller lenders.
TL;DR
- 670 fewer rural small and midsize banks in China by the end of 2025, an 18.6% decrease.
- Many banks were merged into larger lenders or converted into branches.
- This represents the disappearance of independent banking entities, not conventional collapses.
- The trend continued in 2026, with 191 village banks ceasing independent operations in the first nine months.
- As of September 30, 2026, 973 village banks remained, down from 1,651 at the end of 2021.