City commercial banks are an important part and special group of China's banking industry. Their predecessor was the urban credit cooperatives established in the 1980s. At that time, their business orientation was to provide financial support for small and medium-sized enterprises and pave the way for bridging the local economy.
Commercial Bank, abbreviated as CB in English, is a kind of bank, whose duty is to act as a credit intermediary for financial institutions through deposits, loans, remittances and savings. The main business scope is to absorb public deposits, issue loans and discount bills. General commercial banks do not have the right to issue money, and the traditional business of commercial banks is mainly deposits and loans.
Judging from the development of commercial banks, there are two business models of commercial banks. One is the British model. Commercial banks mainly finance short-term commercial funds, which have the characteristics of short lending period and high liquidity. That is, borrowing deposits at a lower interest rate and lending them at a higher interest rate. The deposit-loan spread is the main profit of commercial banks. This business model is relatively safe and reliable for banks. The other one is from Germany, and its business is comprehensive. Commercial banks not only finance short-term commercial funds, but also finance long-term fixed capital, that is, engage in investment banking business.
China implements a separate business model. In order to adapt to the characteristics of separate operation and the development trend of mixed operation in China, the Sixth Session of the Standing Committee of the Tenth NPC passed a decision on amending the Law of People's Republic of China (PRC) Commercial Bank on February 27th, 2003. The new "Commercial Bank Law" revised the relevant provisions of the original commercial bank law that mixed operations were not allowed. On August 29th, 20 15, the 16th meeting of the National People's Congress Standing Committee (NPCSC) deliberated and adopted the "Draft Amendment to the Commercial Bank Law of People's Republic of China (PRC)", which will be implemented on June 30th, 20 15. The amendment made two changes to the original People's Republic of China (PRC) Commercial Bank Law: First, the second item of the first paragraph of Article 39 was deleted; The second is to delete the "loan-to-deposit ratio case" in Item 3 of Article 75. Especially for the second time, the provision that the ratio of loan balance to deposit balance should not exceed 75% was deleted, and the loan-to-deposit ratio was changed from the statutory supervision index to the liquidity monitoring index.