How does the pandemic impact the solvency of small and medium-sized commercial banks? Do you anticipate more monitoring and reform measures to emerge this year?
Thanks for your question. Mr. Cao Yu, vice chairman of the CBIRC, will answer it.
Thanks for your question. In China, there are more than 4,000 legal entities that are small and medium-sized banks, with total assets of around 77 trillion yuan. Small and medium-sized banks are the main force to provide financing services for the agriculture sector and small and medium-sized enterprises. Since the management ability and business capacity of these banks is limited, and especially since their customers are special to some extent, the impact of the pandemic on these banks is quite noticeable.
To this end, according to the requirements of the Financial Stability and Development Committee under the State Council, the CBIRC has gone all out to deepen the reform of small and medium-sized banks and dissolve risks. Several departments in our sector have produced relevant work programs, which have thus far gone smoothly. This year, a string of great and significant reforms to small and medium-sized banks will occur, particularly in regard to market restructuring. Here, I would like to inform you that relevant sectors have provided favorable conditions for small and medium-sized banks, particularly with respect to the policies regarding renewal loans and targeted cuts to required reserve ratios. The CBIRC will also implement differential policies for the banks. All of these will create favorable conditions for their reform.
We believe that with our joint efforts the small and medium-sized banks will get onto a path that allows for sound development. In particular, they will provide more financing services for the agriculture sector and small and medium-sized enterprises, and fully realize their roles. We would like to call on every aspect of society to pay attention to the development of small and medium-sized banks and provide an excellent internal and external environment to allow for their sound development. Thank you.