In a move to ensure public transparency regarding the licensing status of legal entities, the National Financial Regulatory Administration (NFRA) disclosed its list of regulated institutions on August 14, based on statistics compiled through the end of 2025.
The data shows that as of the end of 2025, the NFRA and its local offices supervised a total of 6,489 legal entities. This includes 3,619 banking financial institutions, 114 branches of foreign and Hong Kong, Macao, and Taiwan banks, 239 insurance companies, 2,506 professional insurance intermediary institutions, 8 branches of foreign reinsurance companies, and 3 financial holding companies.
Compared to the end of 2024, the total number of legal entities decreased by 711. The majority of this change was concentrated among rural small and medium-sized banks, while the numbers for other types of institutions remained largely stable.
Varied Changes Across Institution Types
Looking at the breakdown by type, the number of insurance companies, foreign reinsurance company branches, and financial holding companies remained unchanged. Banking financial institutions saw a decrease of 676 entities. The number of foreign and Hong Kong, Macao, and Taiwan bank branches fell by 2. Professional insurance intermediary institutions declined by 33.
Specifically, the number of city commercial banks decreased by one, as Xinjiang Huibe Bank was absorbed. One direct bank, Youhui Wanjia Bank, was also removed due to a merger. The most significant reduction was in rural small and medium-sized banks, which dropped by 670 entities. Non-bank financial institutions decreased by 8, primarily due to the dissolution of certain corporate finance companies. Meanwhile, 3 foreign and Hong Kong, Macao, and Taiwan bank branches were closed or exited.
In the insurance sector, a campaign to clean up and standardize the intermediary market saw 33 non-compliant or abnormally operating professional insurance intermediaries legally removed from the market. During the same period, the regulator approved the establishment of 4 new entities, including Zheshang Wealth Management Co., Ltd., Xingyin Financial Asset Investment Co., Ltd., Zhaoyin Financial Asset Investment Co., Ltd., and Xinyin Financial Asset Investment Co., Ltd., as well as 1 new branch of a foreign bank from Hong Kong, Macao, or Taiwan.
Rural Banks See Significant Reduction with Improved Quality
Rural small and medium-sized financial institutions were the primary focus of this round of structural changes. In recent years, the NFRA has been resolutely implementing central government decisions to prevent and defuse risks in local small and medium-sized financial institutions. Adhering to the principle of "seeking progress while maintaining stability," the authority has adopted a "one province, one policy" approach to steadily and orderly promote reform, risk resolution, and quality improvement within this sector.
The numbers provide clear evidence: by the end of 2025, the total number of banking financial institutions decreased by 676, of which 670 were rural small and medium-sized banks. The total number of rural small and medium-sized bank legal entities stood at 2,933, a net decrease of 670, or 18.6%, from the end of 2024.
Through the continuous reduction of "marginal risk" and "high-risk" institutions, the overall risk profile has significantly converged, successfully guarding against major risk events. It is understood that the reform methods have been diverse and tailored to local conditions. Examples include merging to form provincial or prefectural-level rural commercial banks, having the main sponsoring bank absorb and restructure village banks into branches, or market-based dissolution and exit.
Taking Sichuan Province as an example, a new round of reform since 2021 has focused on improving industry governance and optimizing the legal entity structure. From 2022 to 2024, a pilot program merged banks to form unified legal entity rural commercial banks in 6 cities, including Leshan, Bazhong, Yaan, Deyang, Nanchong, and Dazhou. In 2025, the reform was completed in Guang'an, Guangyuan, Zigong, and Ziyang. The plan is to finish the reform in the remaining 6 cities, including Mianyang, Yibin, Luzhou, Meishan, Suining, and Neijiang, by 2026. Currently, the final stages are underway and are expected to be completed soon. By then, Sichuan will have successfully established a "1+20" legal entity structure for the Sichuan Rural Commercial Bank Union system, becoming the first province in the country to achieve a "city-wide rural commercial bank" goal (excluding the provincial capital city).
While reducing the number of legal entities, a greater emphasis is being placed on improving quality. In recent years, key regulatory indicators for rural small and medium-sized banks nationwide have shown comprehensive improvement. The non-performing loan ratio has continued to decline, the capital adequacy ratio has remained at a stable and compliant level, and loans to agriculture and small and micro-enterprises have continued to grow. This has enhanced their operational quality, risk resilience, and ability to serve the real economy, providing crucial financial support for comprehensive rural revitalization and poverty alleviation.
A prime example is Hainan Rural Commercial Bank, which opened on July 1, 2024. Since its inception, the bank has operated smoothly, with steady growth in its asset and liability scale. It has intensified its efforts to prevent and control risks, focusing on key areas and serving key industrial parks, thereby continuously improving the effectiveness of its financial services for the real economy. By the end of 2025, the bank's total assets reached 412.441 billion yuan, total deposits stood at 344.54 billion yuan, and total loans amounted to 207.313 billion yuan. These figures represent increases of 9.78%, 8.44%, and 10.66%, respectively, compared to before the unified legal entity was established. Its business scale now firmly ranks first among provincial financial institutions, and it has received a "Double AAA" credit rating from both China Chengxin International and Lianhe Credit Information Service. It has entered the top 100 of the national banking industry for the first time, ranking 80th, and was also named to the China Top 500 Service Enterprises list, placing 371st.
Expert: A Shift from Scale-Driven to Quality-Driven Growth
Analyzing the data and examples, Yang Tao, a researcher at the National Institution for Finance & Development (NIFD) under the Chinese Academy of Social Sciences (CASS), believes this set of data does not represent a "subtraction" for the rural financial system. Instead, it is an "addition" that integrates risk resolution, structural optimization, and service upgrades. It marks the transition of China's rural finance from scale-driven to quality-driven growth.
He further explains that the reduced number of legal entities were mostly integrated into larger banking systems with more capital, better governance, and stronger risk control through market-based and legal methods like mergers and acquisitions. The core theme is the convergence of overall risk and the enhancement of system stability. This process aligns with the universal pattern of global banking development, where mergers and acquisitions drive structural optimization and reduce systemic risk as the industry matures.
Secondly, regarding the public's most pressing concern about deposit safety, this round of reform has provided fundamental and institutional reinforcement. Regardless of the merger or restructuring, depositors' principal and legal interest on deposits are fully protected by the deposit insurance scheme. This institutional arrangement is not weakened by changes in the institution's form. The merged bank's entire business, assets, and legal liabilities are fully assumed by the new entity, ensuring a seamless continuation of depositor accounts. In terms of actual protection level, the guarantee for deposits has shifted from a smaller, less resilient single entity to a stronger entity with a larger capital base, better liquidity management, and stricter consolidated supervision. This provides a dual guarantee of deposit safety through both the system and the stronger capital base.
Finally, the "reduction in quantity" and "increase in service quality" are not contradictory. The "capillaries" of financial services are not shrinking; they are becoming more efficient. There is a concern that fewer institutions mean services are farther away. However, financial services depend more on functional strength than just the number of institutions. During the reform process, the inclusive service functions of the original bank branches are uniformly taken over by the absorbing bank. The layout of services is continued and optimized through a multi-pronged model combining "physical branches, online channels, and mobile services," ensuring service accessibility is not negatively impacted. Concurrently, the merged entities have strengthened their capital base. Supported by economies of scale and technological empowerment, they can leverage a more stable asset quality and a clearer market positioning focused on supporting agriculture and small businesses to precisely channel financial resources into key areas of rural revitalization, continuously enhancing their ability to serve the real economy through structural optimization.
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